IMF Economists: ‘We Were Wrong.’ Will Someone Please Tell The Press And The Politicians.
Posted on August 19, 2012

Two economists at the International Monetary Fund published a paper (The Chicago Plan Revisited) saying that fractional reserve banking causes most of our economic woes and that removing it would increase our GDP by 10%. This is according to the mathematical models the IMF has of our economy. The Chicago Plan was first published on March 16, 1933 by 8 economists including Irving Fisher. Its main proposals were to end fractional reserve banking and to dramatically reduce government debt.

SNIP

Those two IMF economists listed the following as proven benefits from ending fractional reserve banking.

1) It would reduce business cycle fluctuations.

2) It would completely eliminate bank runs.

3) It would dramatically reduce government debt. (Please note the works of Rogoff and Reinhard who proves that all governments default after debt to GDP reaches 90%.)

4) It would dramatically reduce private debt as money creation no longer requires simultaneous debt creation.

http://vidrebel.wordpress.com/2012/08/19/imf-economists-we-were-wrong-will-someone-please-tell-the-press-and-the-politicians/