Follow this link to the article by L. Randall Wray.
Here is the tail end of one of his reasons:
I do not know any household that has been able to run budget deficits for approximately 190 out of the past 230-odd years, and to accumulate debt virtually nonstop since 1837.
Follow this link to the editorial on the McClatchy News web site. Finally a balanced approach to the issue. I do not claim that the quotes below that I have selected are completely balanced. For that, you have to read the whole article.
But while the situation in Arizona is dire in some respects, it’s actually improving, not getting worse. For example, the U.S. Bureau of Justice Statistics notes that violent crimes in the state fell from 512 per 100,000 people in 2005 to 447 per 100,000 people in 2008, the last year data was compiled.
And, despite the clamor about dangerous immigrants, crime rates are lowest in states with the highest immigration growth rates — such as Arizona. Crime in the 19 states with the highest immigrant populations dropped by 13.6 percent from 1994 to 2004, compared to 7.1 percent for the other 32 states.
Finally, although the U.S. illegal immigrant population doubled to about 12 million from 1994 to 2004, the violent crime rate nationwide declined by 35.1 percent while the property crime rate fell by 25 percent. So, more illegal immigrants does not equate to more crime.
By the way, it is well known to Sturbridge residents that I-84 is a major drug trafficking route. Should we put up a fence between Massachusetts and Connecticut? Maybe the police ought to be empowered to find out if people are legal Massachusetts residents or bonafide tourists traveling on I-84. Or would it be enough to just check them at the Mass Pike toll booths?
My interaction with the author of the article I linked to in my previous post, Stock Market Collapse: More Goldman Market Rigging?, has been very instructive.
She responded to my criticisms of her understanding of fractional reserve banking with a link to a blog whose authors’ credentials are not apparent.
This did inspire me to look for what authoritative sources had to say.
I did find this link on the Federal Reserve Board web site to a speech by one of the Fed governors, Laurence H. Meyer at the Distinguished Lecture Program, Swarthmore College, Swarthmore, Pennsylvania . It does basically confirm my view of the meaning of fractional reserve banking, but it has a lot of information about this subject in a more modern context than when I first learned of it in the early 1960s.
In the United States, depository institutions hold reserves either in the form of currency–so-called vault cash–or balances at Federal Reserve Banks. Banks are required to hold reserves against their transactions deposits (required reserves), and they voluntarily hold a small amount of excess reserves.
I am going back to the Federal Reserve article to read the item more carefully and digest what it has to say about e-money.
I also had found a nice article in WikiPedia (with references).
So now, if you see any references to speeches by Ron Paul, you can come back here to find the link to the real story, as opposed to the Ron Paul fictional story.
I should say that a huge amount of the money flow is not through banks that come under reserve requirements.
Investment banks are an example. Other examples include hedge funds, derivatives, and perhaps even e-money.
Maybe my argument with the likes of Ron Paul is that he blames fractional reserve banking as the cause of our problems when in fact the problems occurred outside the system of regulated fractional reserve banking. The problem is not with the Federal Reserve system as he likes to say. It is with the entities that are outside the control of the Federal Reserve system.
I don’t see why the focus of the solution should be on doing away with the Federal Reserve system, when the answer might be bringing more things under its control.
As I think it is Barney Frank likes to say, “We should regulate not on what an entity is called, but on what it does.”