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Actually it kind of is, in as much as it expands the money supply. When a bank issues debt, the money is created 'out of thin air'. When the debt is paid off,

Actually it kind of is, in as much as it expands the money supply. When a bank issues debt, the money is created 'out of thin air'. When the debt is paid off, that money is destroyed. However usually more debt is being created than redeemed as things go on, so the total money supply increases (this is a good thing, as it allows the economy to expand). Various regulations and central bank market interventions (quantitative tightening/easing) control this process, which thus can be induced to 'print money' if the government wishes - assuming they have a sovereign currency.

anonymars 10mo ago
Fractional reserve banking is still not the same as printing money outright If you borrow $100 USD from the bank, and pay it off immediately after, it's clear no money was "created" as such If $100 USD is "printed" outright, it's clear that there's no way to achieve that same result The fact that the debt isn't generally paid back immediately doesn't change that fundamental. That's what I meant when I said any apparent "change" is about "time" rather than "money" It is true that the money supply should expand with the economy. Turning raw materials into finished goods represents a larger "net economy" at the end of the process than at the beginning. (Indeed that's basically how it makes sense to have interest on debt in the first place) Nevertheless, printing money out of whole cloth is different from issuing debt
- thunky 10mo ago
  > If you borrow $100 USD from the bank, and pay it off immediately after, it's clear no money was "created" as such The bank "printed" money by handing out cash that it didn't have. It only had a fraction of it. That new money went free into the world with the same respect any other cash gets. You and I can't pull that off.
  - anonymars 10mo ago
    > That new money went free into the world Along with a "-$100" IOU on the books That is different from merely "printing money"
    - thunky 10mo ago
      > Along with a "-$100" IOU on the books Which they can use as an asset to create (lend out) even more money that they don't have. Call it what you want, but the bank is adding money to the economy that wasn't there before.
      - anonymars 10mo ago
        The bank is essentially converting a short term IOU (liquid deposits) into a longer term IOU (the loan) It's a function of time (mediated by interest rates, subject to market demand, namely liquidity preferences) That's not the same as outright "printing money" which is not backed by any deposits (what does the balance sheet look like when "printing money"?)
        thunky 10mo ago
        Ok fine I'll agree call it "creating money" rather than "printing money", because it's not the same mechanism the central bank uses to "print" permanent money (technically not printed either but whatever), but money is still created by the bank.

anonymars 10mo ago

Fractional reserve banking is still not the same as printing money outright If you borrow $100 USD from the bank, and pay it off immediately after, it's clear no money was "created" as such If $100 USD is "printed" outright, it's clear that there's no way to achieve that same result The fact that the debt isn't generally paid back immediately doesn't change that fundamental. That's what I meant when I said any apparent "change" is about "time" rather than "money" It is true that the money supply should expand with the economy. Turning raw materials into finished goods represents a larger "net economy" at the end of the process than at the beginning. (Indeed that's basically how it makes sense to have interest on debt in the first place) Nevertheless, printing money out of whole cloth is different from issuing debt

thunky 10mo ago
> If you borrow $100 USD from the bank, and pay it off immediately after, it's clear no money was "created" as such The bank "printed" money by handing out cash that it didn't have. It only had a fraction of it. That new money went free into the world with the same respect any other cash gets. You and I can't pull that off.
- anonymars 10mo ago
  > That new money went free into the world Along with a "-$100" IOU on the books That is different from merely "printing money"
  - thunky 10mo ago
    > Along with a "-$100" IOU on the books Which they can use as an asset to create (lend out) even more money that they don't have. Call it what you want, but the bank is adding money to the economy that wasn't there before.
    - anonymars 10mo ago
      The bank is essentially converting a short term IOU (liquid deposits) into a longer term IOU (the loan) It's a function of time (mediated by interest rates, subject to market demand, namely liquidity preferences) That's not the same as outright "printing money" which is not backed by any deposits (what does the balance sheet look like when "printing money"?)
      - thunky 10mo ago
        Ok fine I'll agree call it "creating money" rather than "printing money", because it's not the same mechanism the central bank uses to "print" permanent money (technically not printed either but whatever), but money is still created by the bank.