The Seattle Loop: Reclaiming the Public Interest

By Tyler Suksawat & Scott Ferguson

A palpable, but indecisive enthusiasm permeated a recent Seattle arts forum, revealing a city desperate for a future that no one quite knows how to build, let alone finance. Despite the proliferation of sticky notes with compelling schemes, as Amanda Manitach describes in The Stranger, the arts roundtable lacked a cohesive strategy for gathering its aspirational potpourri into an actionable mosaic. The obstacle, per usual, is price. How can Seattle even begin to envision a just, prosperous, and creative tomorrow when it can barely afford extant annual expenditures? 

A path forward exists. Yet it requires that we redesign Seattle’s current fiscal architecture.

The crux of the problem is that every year millions of Seattle’s tax dollars line the coffers of capitalists outside the city. When the city borrows money for bridges, schools, or transit, it pays massive interest fees to private banks on Wall Street. This “leak” is a primary cause of local austerity—the feeling that the city is always broke, even when there’s plenty of good ideas and idle resources to go around.

The time has come to plug that leak. By creating a city-owned public bank, Seattle can not only provide residents with low-cost financial services; it can also buy its own debt and pay interest to the city instead of private creditors. This simple shift transforms debt into a self-replenishing fund, giving us the financial hardware to build what our communities actually need—from social housing and municipal grocery stores to green jobs and a thriving arts scene. Manitach lists a public bank as one potential fix among many. But a municipal bank is not just one sticky note in the pile; it is the very foundation upon which every other progressive initiative depends. 

Such a plan transforms municipal finance from a leak into a loop. Instead of tax dollars leaving the city to pay private bank interest, a public bank creates a self-growing circuit. 

Here is how it works: (1) Seattle passes legislation, issuing debt to finance vital programs; (2) the municipal bank creates enough credit to purchase the city’s debt; (3) that money moves into the pockets of community members and local businesses; (4) the city next pays off the debt’s principal and interest to its own public bank; (5) the bank then transfers the interest and any additional banking revenue back into the city’s general fund; (6) the proceeds are finally re-invested into the next community project. With this, we stop the drain and grow the loop.  

The Seattle Loop is an engine for an entire ecosystem of loops. As Seattle’s public bank anchors the city’s finances, it can simultaneously empower myriad additional circuits of desperately needed public provisions. These smaller loops do not just draw from the city’s credit; they expand it. Weaving these connections together, we construct an adaptable web of public collaboration and value that becomes more powerful with every new participant who activates the city’s many circuits. 

How, then, to push the Seattle Loop from a visionary blueprint to a governing, democratic reality?

Feeling Loopy 

At its heart, the Seattle Loop is a generative mechanism of public credit that routes city finance through a new public bank, equipping us to provision our own city. This strategy internalizes Seattle’s public debt, utilizing a non-profit public bank to purchase the city’s municipal bonds. Capturing the interest payments that currently leak to private creditors and speculative markets, the Loop transmutes the city’s debt into a self-generating fund that increases Seattle’s capacity to secure public goods without the constraints of traditional austerity. 

To appreciate this plan’s innovativeness, we must correct a persistent myth: the idea that a bank’s ability to purchase bonds is constrained 1-to-1 by its existing deposits. As any modern banker knows, financial institutions do not lend out deposits. Rather, they routinely create credit anew from thin air. Loans create deposits, so to speak, not the other way around. Banks expand their balance sheets first and manage reserves afterward. Like it or not, that’s just how banking works. 

The constraints on bank lending are, in truth, regulatory capital ratios and liquidity coverage rules, not a finite quantity of available deposits. So, were Seattle to sell municipal debt to its own non-profit bank, the operation would generate fresh lines of credit (and associated interest) that would have never existed otherwise. Regularly overlooked, this inherently generative dimension of banking enables the Seattle Loop to dramatically enlarge the city’s fiscal ambit.

Rather than asking groups to adopt a single, rigid policy, our approach centers on the co-creation of specialized cross-city loops. We view the city’s central public bank as a foundational infrastructure that allows labor unions, housing advocates, and arts and culture coalitions to fashion their own distinct loops according to unique needs. Each time a new initiative launches—whether that’s a public payment system, municipal Job Guarantee or public entertainment venue—it does more than utilize existing credit; it expands the project’s collective reach. By bringing together these diverse loops, we turn municipal finance into enduring public cooperation and wealth. This growth doesn’t happen solely from the top down; it spreads through every new connection, ensuring that each project’s success bolsters the stability of the entire city. When you get in the loop, you are helping to engineer a flourishing ecosystem that thrives on mutual reinforcement.

Consider the potential of a city partnership with UFCW 3000, which represents a pivotal cross-section of grocery and agricultural workers. Through the Seattle Loop, we can maintain a municipal jobs program that establishes public grocery stores, ensuring both community food access and stable union employment. The Loop’s banking infrastructure can further provide essential financial services to the cannabis industry—a sector currently marginalized by federal banking restrictions and harassed by thieves—offering much-needed stability and security to both local businesses and their employees. At the same time, city-owned venues, a public payment system, and a complementary currency can work in tandem to wrest control over local arts and culture from corporate monopolies and manipulative ticket vendors. 

Loop Initiatives

The Seattle Loop provides the administrative and financial structure to implement a host of programs, transforming community hopes and dreams into a coordinated system. The following list, though hardly exhaustive, offers several concrete possibilities, beginning with the municipal bank. 

• Public Bank: A central municipal financial institution that provides low-cost banking services to community members, local firms, and nonprofit organizations, while routing all city debt through this public channel. Internalized municipal borrowing ensures the vast majority of banking revenue—and the interest that would escape to Wall Street—stays in the city’s general fund. This recaptured wealth serves as a permanent, self-replenishing resource that dramatically widens the city’s fiscal capacity to provide for the public good.
• Public Payment System: A fee-free municipal digital wallet that allows residents and businesses to bypass the extractive tolls of private credit card processors and ticket vendors.
• Complementary Currency: A local digital money generated and managed by the city and its public bank. It is designed to extend the city’s fiscal reach, further stimulating commerce and keeping money within the community.
• Municipal Job Guarantee: A permanent public employment program offering a living-wage job and benefits to any resident who wants one, focused on community care and infrastructure.
• Public Arts & Culture: A public option for the arts, which secures the entire infrastructure of creative production—including venues, media platforms, and management—via a public payment system, complementary currency, and Job Guarantee that insulates local expression from corporate control and extraction. 
• Youth Employment Program: A targeted initiative that integrates young people into the city’s productive life through paid mentorships and meaningful public service roles in cooperation with public schools.
• Publicly Owned Housing: Socially managed residential developments that prioritize stable, well-furnished shelter as a human right rather than a speculative asset.
• Municipal Groceries and Supply Chains: City-run food distribution networks that eliminate food deserts and secure affordable and reliable supply lines for essential goods. 
• Vacancy Taxes on Property: A fiscal tool used to discourage property hoarding and incentivize the productive use of urban spaces for the public good.
• Public Nonprofit Childcare: A model for repurposing underutilized school infrastructure into high-quality, universal childcare hubs as a proactive alternative to school closures.
• Commercial Rent Controls: Protections that cap lease increases on commercial real estate to prevent the displacement of local small businesses and cultural venues.
• RCV Competency: Educational workshops and pilots for Ranked Choice Voting to assist communities in navigating more democratic and representative election formats.
• Public School Credit Access: A shift in K-12 financing that allows school districts to tap into municipal credit to fund facilities and enrichment without traditional debt dependency.
• Public Worker Pensions: A strategy for reinvesting pension funds in the municipal bank to safeguard retirees’ wealth, while directly supporting local community stability.
• Zero Waste and Right to Repair: A public program for circular economies that provides community repair clinics and municipal composting to end the era of planned obsolescence and food waste.

A Statewide Legal Framework

While the movement begins in Seattle, the vision and fight are inherently statewide, since at present inaugurating a municipal depository requires the authority of the Washington State Legislature. We are not looking to reinvent the wheel, but to accelerate a movement already in motion. We aim to revive and pass a refined version of the Washington State Public Bank Act (previously SB 5188), a framework championed by State Senator Bob Hasegawa that has already cleared the State Senate in past sessions.

Our immediate goal is to establish a legal architecture that follows the successful precedent of California’s Public Banking Act (AB 857), which in 2019 allowed local municipalities to charter their own public banks. Adapting these proven models to Washington, we can overcome the antiquated interpretations of our State Constitution that currently hem in municipal power. Our legislative strategy focuses on three pillars:

• Codifying Public Authority: Building on the “Public Financial Cooperative” model from SB 5188, we will authorize cities and counties to establish public depository institutions, giving them the same financial agency recently won by cities like Los Angeles and San Francisco.
• Modernizing Lending Protections: Washington’s Constitution (Article VIII, Sections 5 and 7) rightly forbids using public credit to aid private profit. We will clarify that a public bank, by definition, serves a fundamental government purpose—conducting public finance for public goods—and therefore acts as a shield against, rather than a vehicle for, private subsidies.
• Enabling Inter-Municipal Cooperation: The final pillar authorizes cities and counties to pool their credit and deposits into an interdependent statewide system. Such cooperation allows a municipal pilot in Seattle to evolve into a resilient network, ensuring that smaller communities and rural counties can access the same low-cost credit as the state’s largest urban centers.

Reclaiming the Public Interest

The Seattle Loop represents more than a financial intervention; it is an open invitation to develop and share municipal wealth. 

In this movement, the call to reclaim the public interest acts as a double recovery. Literally, we recapture the enormous interest payments currently siphoned off by private debt service, routing those resources back into the city’s generative circuits. More deeply, however, we reclaim the very purpose of municipal governance, ensuring that the public interest—our collective well-being and democratic intent—once again directs our collective life.

This is our moment to build a city where the power of public credit is as resilient and expansive as the people who make it. 

Join us in the Seattle Loop.