The libertarian side of me says, "I'm not allowed to counterfeit... why should banks be?" But I'm curious as to how this actually benefits people in the long run instead of just devalue currency.
Banks aren't printing currency. Furthermore, the loans can only be granted because the banks have excess reserves from either previously not lending to the maximum or because of expansionary actions by the Federal Reserve. Banks only "create" money to the extent that they let previously granted money be put into circulation.
IMO, individual banks have too much power to not "create" money.
What's the difference between printing currency and "creating money?"
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