National debt of the United States: Difference between revisions

Two economists, Jaromir Benes and Michael Kumhof, working for the [[International Monetary Fund]], published a working paper called ''[[Chicago plan|The Chicago Plan Revisited]]'' suggesting that the debt could be eliminated by raising bank [[reserve requirement]]s and converting from [[fractional-reserve banking]] to [[full-reserve banking]].<ref>Ambrose Evans-Pritchard (October 21, 2012) [https://www.telegraph.co.uk/finance/comment/9623863/IMFs-epic-plan-to-conjure-away-debt-and-dethrone-bankers.html "IMF's epic plan to conjure away debt and dethrone bankers"] ''[[The Daily Telegraph|The Telegraph]]''</ref><ref>Jaromir Benes and Michael Kumhof (August 2012) [http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf "The Chicago Plan Revisited"], International Monetary Fund working paper WP/12/202; accessed November 6, 2016.</ref> Economists at the [[Paris School of Economics]] have commented on the plan, stating that it is already the ''status quo'' for coinage currency,<ref>[http://hal.cirad.fr/docs/00/74/79/04/PDF/12064.pdf "Debt-Deflation versus the Liquidity Trap: the Dilemma of Nonconventional Monetary Policy"] ''CNRS, CES, Paris School of Economics, ESCP-Europe'', October 23, 2012</ref> and a [[Norges Bank]] economist has examined the proposal in the context of considering the [[Financial services|finance industry]] as part of the [[real economy]].<ref>{{Cite web |url=http://works.bepress.com/cgi/viewcontent.cgi?article=1009&context=thorvaldgrung_moe|title="Credit and debt in Economic Theory: Which Way forward?" ''Economics of Credit and Debt workshop'', November 2012 |url=http://works.bepress.com/cgi/viewcontent.cgi?article=1009&context=thorvaldgrung_moe}}</ref> A [[Centre for Economic Policy Research]] paper agrees with the conclusion that "no real liability is created by new [[fiat money]] creation and therefore public debt does not rise as a result."<ref>[http://www.cepr.org/pubs/PolicyInsights/PolicyInsight62.pdf "The economic crisis: How to stimulate economies without increasing public debt"] {{webarchive|url=https://web.archive.org/web/20120916093844/http://www.cepr.org/pubs/PolicyInsights/PolicyInsight62.pdf|date=September 16, 2012}}, Centre for Economic Policy Research, August 2012.</ref>