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With fractional reserve banking, it is the private banks and not the government that decide how much money to create. Sure, the government can set the very short-term interest at which they will lend money to the banks, but that is a very indirect way to control the money supply...

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Wed Mar 1st, 2006 at 08:49:23 AM EST
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