State and municipal governments already have public lending programs, which are generally not seen as distortions of the free market. They exist because private banks are not lending in some sectors that need financing. Montana finances first-time ranchers and farmers; Sonoma County has its Energy Independence Program; and San Francisco has half a dozen mortgage lending and small business programs. Globally, public banks lend countercyclically, providing credit when and where other banks won't. This does not crowd out private banks. Germany and Taiwan, which have strong public banking sectors, are among the most competitive banking markets in the world.Banking, money and credit are not market goods but are economic infrastructure, just as roads and bridges are physical infrastructure.
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