[RealityNow]

I think it has less to do with merely growing the money supply, and more to do with preventing and quickly recovering from crashes.

The Great Depression was exacerbated and prolonged by us being on the gold standard and thus not being able to use monetary stimulus. Also with a gold standard, there's a limit to how much fiscal stimulus a government can conduct as well because every dollar has to be convertible to gold.

Essentially, fixed money supply = less control. On the surface this might seem like a good thing, and if money is in the hands of a corrupt oligarchy I'd prefer the fixed money supply. But most people don't realize that only 3% of the money supply is printed by the government (the rest is created by private banks), and economic bubbles/crashes and inflation/deflation aren't restricted to fiat currencies.

[equalunique]

>most people don't realize that only 3% of the money supply is printed by the government (the rest is created by private banks)

do you have a source for this claim?

[nunyabuizness]

Section "Money creation in reality" [1]. States that 97% of money in circulation are from bank deposits, the majority of which are themselves created by commercial banks (though it doesn't explicitly state that the rest comes from governments).

[1] http://www.bankofengland.co.uk/publications/Documents/quarte...