Actually it does not, or at least does not when institutions like the Federal Reserve Bank are operating as they were designed to. The purpose of the Federal R

Actually it does not, or at least does not when institutions like the Federal Reserve Bank are operating as they were designed to. The purpose of the Federal Reserve is to set inflation in a way that is optimal for the economy. That does not mean providing the government with cheap loans. In fact, one reason the Fed is independent from the government is so that it cannot be used for this purpose. At the end of the day, people are able to borrow only because people are willing to lend to them. There is no magical trick the federal government can use to get around this constraint. That said, I don't believe that the analogy is useful, but for different reasons: the federal government has completely different responsibilities from the city government. Each issue should be judged on its merits not by some crude analogy.