Chicago must demand zero-interest loans from the Federal Reserve

There are better solutions, ones that would allow Chicago to ease its debt load without penalizing its working-class residents with higher taxes: demand zero-interest loans from the Federal Reserve.

Using them would allow Chicago the money it needs now without taking an additional pound of flesh later. It would be an especially beneficial practice in a city like Chicago, where Black and Latinx residents make up nearly two-thirds of the total population, because – governments that serve higher concentrations of people of color are more likely to be locked into higher interest rates than governments that serve whiter communities.

It’s time to, as we put it, #Can­cel­Wall­Street. We need to invest the money currently going towards interest on debt into bolstering essential public services instead.  

According to a recent report, Chicago could save $1.1 billion a year if the Federal Reserve grants local and state governments zero-cost loans. That’s enough to house every homeless Chicagoan instead of causing a spike in homelessness thanks to higher property taxes. Or it’s enough to help 74,042 families avoid eviction.

By forgoing high-interest Wall Street debt, city and state governments across the country could reclaim more than $160 billion that could be redirected to much needed public services.

There is no reason for taxpayers to pay exorbitant interest fees when the nation’s central bank could offer no-interest loans directly to local and state governments.