Many have proposed having government-provided small-scale banking as an option, administered through the post office. It's a government office, with branches in every town, that already handles things like money orders.

> why does the US government not offer all citizens a bank account?

We had one [1]. It was considered redundant to private banking. I'm surprised no states have attempted this.

[1] https://en.wikipedia.org/wiki/United_States_Postal_Savings_S...

Exactly one state has! https://en.wikipedia.org/wiki/Bank_of_North_Dakota

It's state-owned but functions as a typical retail bank that takes deposits, makes mortgages, business loans, etc.

It's a neat historical anomaly but it is not very practical for most people to bank at. You have to be a North Dakota resident, they have one physical office in Bismarck North Dakota, and they do not provide online banking.

> Because of our unique structure as a state-owned bank, it is the Bank’s policy not to compete with the private sector for retail deposits. Therefore, convenience products such as debit cards, credit cards or online bill pay are not offered. BND has one location at 1200 Memorial Highway in Bismarck, North Dakota.

https://bnd.nd.gov/public/

> You have to be a North Dakota resident, they have one physical office in Bismarck North Dakota

This is utterly reasonable. It's a public service, after all.

> and they do not provide online banking

I see an account login button on the top right. You have to open accounts in person. But again, utterly reasonable as an anti-fraud measure.

Because banks aren't just "store houses of money", they play important roles in the flow and quantity of money. (Each time they lend money they create money money out of thin air.)

Which means there is risk in being a bank, as you probably remember from when a few banks failed a little while ago.

But if the fed was a bank, it would be risk free (how could the fed fail?). Which cause all sorts of trouble. The fed could take actions (loan risky money) without worry. Or they would not be permitted to loan money - but that would cause even bigger problems because it would restrict the money supply.

There's no good economic way to do it.