The federal government is the monopoly issuer of the US dollar and is mandated to create it “for the common welfare” in Article 1: Section 8. While it isn’t very good at executing its programs, it does do one thing well, and that is spending money. It has just been misdirecting that spending for the last few decades, which is causing considerable hardship for the people and their communities.

Congress could easily make funding available to states and cities at current Fed overnight rates, or simply guarantee such instruments issued by them and set criteria to assure legitimacy with an expansion of FDIC to include such issues. I have long advocated for the Fed to expand into deposit banking and utilize the USPS locations to give every American access to bank services. Giving investors a choice between community bonds and Treasury bonds would be no major undertaking. If the return and guarantee were the same the community bonds would likely be the first to fly off the shelf.