I highly recommend reading this newsletter.
The concept of a public bank strikes many on the right (and the left) as socialist, BUT North Dakota, a very Republican Red state, has long had one. Moreover, public or sovereign banks, have been central to the ability of Canada, Sweden, Germany, and even the Asian tigers to pull out of the post Bush era collapse.
Another strong argument for a state bank, comes from the amazing solidity of the credit unions though the era of the Bush Bust. It is important to realize that BECU not only survived without federal largess, it has prospered and grown!