About a year ago, Kirsten Gillibrand proposed turning the Post Office into a bank. Coverage by more left-leaning publications like Slate was breathless – in that they couldn't even wait to remove the non-grammatical "their business just isn’t just valuable" typo before publication (or since). You gotta publish your hot take as soon as possible! To be fair to Slate: people's interest in any Post Office regulation change is probably pretty limited.

Of course, around here we wait an entire year before we discuss ideas like this, and in that year I think the public vision really hasn't cleaned up at all. So, setting aside the obvious jokes about trying to build a hate-amalgam of poor customer service between both banks and post offices – maybe we can even get the tellers to be DMV employees – is this idea a good one?

The funny part is, even Slate has done the diligence needed to understand the proposal – the first step is visiting Wikipedia, which informs us the United States used to have this service. It was popular mostly because it was less likely to experience bank runs. Then we had federal deposit insurance, and the program was stopped.

Is this enough information to determine it was a mistake? Slate seems to think decades of experience isn't enough, and that getting rid of the system probably was a mistake. But it's not like we've had lots of bank runs since 1966. Is it the other half of the proposal – that post offices ought to give out payday loans at the one-month T-bill rate? I can't imagine why that would be appealing – it would literally be a public benefit system to subsidize not meeting your personal commitments. Surely more deserving people could get handouts, and other systems which would induce less chaos in the modern financial system. I can't even imagine the strange fraud involved with this – at the very least, you can expect people offering ~$10/mo or a free Netflix account to use your name for the revolving credit. If the finance industry couldn't arbitrage an interest rate discrepancy, they deserve the dumb regulation they get.

But to return to the central proposal: if you can protect people against bank runs (which deposit insurance does), you don't want the government holding their savings. You want money in people's savings accounts to be used to invest in their community. Making loans to trustworthy small businesses is a tremendously useful service, and government bank accounts make sure less money is available for that.

Proponents of the system suggest it would be so terrible that only truly desperate people would use it. Let me suggest, if I can, that I have no trouble believing it will be at least that bad. But it doesn't feel like you're doing anyone a favor anymore, does it? And outside of concerns about deliberately bad government services (which would have to be worse than the unintentionally bad services), I'm not sure you can improve people's life by giving them credit cards when no one else thinks they can be trusted. Where does the moral duty to help people out of the ensuing crippling debt force us to intervene? Can we only help people out of a hole once they've fallen into our carefully constructed trap? Or can we just leave them mostly alone – I've lived with just cash, it isn't a terrible burden.