That's true, but $100 in a series-E savings bond is just sitting around waiting for tax dollars to pay its coupon rate. Not really helping anyone and certainly

That's true, but $100 in a series-E savings bond is just sitting around waiting for tax dollars to pay its coupon rate. Not really helping anyone and certainly not participating in the fractional reserve system (to the extent that the federal government runs such a system to its own advantage :-)). When I helped set up one of these accounts for the startup I was in, we set it up to hold the $10 to $20 million that came in from investors. We bought t-bills through Goldman Sachs. They are very liquid, they pay a marginal return, and they are intrinsically insured. At most we kept $100K in our "regular" bank account[1] to pay salaries and taxes. Paying vendors consisted of simultaneously selling some t-bills, wiring the money to the vendor, and putting the fractional remain into the checking account. [1] This was the FDIC insurance limit so we didn't hold more than that in a depository account.