[imtringued]

I am sorry but fractional reserve banking isn't the problem, nor is debt based money the problem. You can't solve the problem without allowing interest rates to be negative when people want to pay off their debts at a faster rate than people wanting to spend off their credits/deposits.

The problem is quite simple. Money has no maturity but debt has a deadline. This asymmetry causes problems regardless of whether you have a gold standard, full reserve fiat or fractional reserve fiat.

In other words, if you can fix the asymmetry or eliminate the zero lower bound it doesn't actually matter what form your money takes.

[fnl]

I don’t think Daly is suggesting to move away from debt as an instrument in his work, only to establish a 100% reserve system for commercial banks, including the Fed. He was suggesting to nationalize money supply via the Treasury, to avoid bank runs and fiascos like they happened just now to CS and SVB.

Apparently, this was already the direction of thought among some economists in the 1920s (like Frank Knight and Irving Fisher), but then got overruled by the eternal growth mindset that evolved during the Great Depression (which Daly claims leads to “uneconomic” growth). Printing money as an instrument should very much be available - but only to the Government/Treasury.

[fnl]

Just to expand on the above, as two days later I now feel it is hard to understand how my reply is related to imtringued‘s last paragraph (“if you can fix the asymmetry or eliminate the zero lower bound it doesn't actually matter what form your money takes”):

If you don’t allow banks to “print debt” out of thin air by eliminating fractional reserve banking, as Daly suggested in his work, I believe you eliminate that asymmetry. Actual money is lent, actual money has to be returned.

The question that remains then is if it is valid to ask for interest on that money. But I believe that is acceptable, and the rate might be set to 0% or even negative in the right circumstances.