&gt; &quot;1) Money is created by giving out loans (fractional reserve banking), so I assume you&#x27;re talking about some other way of creating money. What, exactly, would you do to the Fed to change governance?&quot;<p>Let&#x27;s look at this in more detail, as it&#x27;s clear I haven&#x27;t explained the plan well enough yet.<p>First, I should clarify the Positive Money campaign I linked to is about money reform in the UK banking sector, but the general ideas can apply equally to the US, even if the implementation details would be different.<p>Okay, so let&#x27;s look at the situation in the US. Money in the US is generated in two different ways:<p>1. Federal Reserve generates money for the US government to spend through the sale of government bonds.<p>2. Banking system generates money through making loans.<p>I&#x27;m going to leave the problems with the current systems for the time being, so let&#x27;s skip to what we would change if we wanted to have a single central body in charge of new money.<p>Firstly, you would take the power to create money away from the banks. Banks could only lend money they had available to lend. This could work through lending out the savings of other bank customers, with customers able to choose how much or little of their money they wanted to invest, and what risk&#x2F;reward ratio they wanted to have with their investments.<p>Secondly, you would want to change how money reached into the economy. If banks couldn&#x27;t create new money, who can? Should government take on this role? The risk with giving governments this power is they might end up printing more money than is needed in order to fund extravagant government projects. How do you get around this?<p>If the Positive Money ideas were applied in the US, you wouldn&#x27;t have the Fed selling bonds. In some sense the Fed wouldn&#x27;t exist. What you&#x27;d have instead is one central, transparently-run group controlling how much new money was created, which sets the budget for the government to spend. All new money would be spent into the economy through government programs. There would be no need to sell bonds, the money would be created without debt (i.e. without the need to pay interest to groups willing to buy government bonds), it would simply be new units of exchange available for use in the economy.<p>Any questions on the above?