Link to Boehner:
http://www.campaignforliberty.com/blog.php?view=39290.

a majority of the members [of House and Senate committees on bank regulation] barely know what a central bank is, let alone how it functions

It stands to reason that Reps and Senators who are not members of those committees are even less knowledgable. If so, then it should be extremely difficult to get rid of the FRS by repeal of the relevant laws, given the confusion that would reign in Congress during public disucssions of a proposal to abolish the FRS. The benighted ones would be frightened with warnings of dire consequences, esp. unemployment, for their constituents, that would be associated with abolition. (Granted, abolition will be painful.)

Unfortunately, this means a far more radical solution, e.g. abolition of the central government of the USA, could be needed just to get rid of the central bank. Still, this suggests that a poison pill could be presented to members of Congress to encourage seriousness among them. “Senator, Representative, your choice is as follows: Either abolish the Fed or loose the whole enterprise that’s seated in DC, the Fed included.”

The best solution: no more government debt.

Great idea. If only it were easy to sell it to the people who expect the state to be like a surrogate parent that rigs commerce (on behalf of both some laborers and some capitalists), that redistributes wealth, and that provides a means, namely the military, to sate warmongers’ thirst for aggression and violence. Of course, even the warmongers don’t want to be presented immediately with the day’s bill for the day’s militarism, as the author suggested with “[i]t [the government] fears a tax revolt if it raises taxes”.

So what would motivate a Congressperson to consider seriously a proposal to abolish all borrowing? Well, potential for reelection. But if the Constitution were made a dead letter, there could be no reelection, at least not to Congress. But abolition of borrowing would increase the likelihood of a tax revolt.

If the banking system is a fractional-reserve system, the money multiplies many times over.

For a technical explanation, with T-accounts, of what’s going on see also Modern Money Mechanics, “A Workbook on Bank Reserves and Deposit Expansion” that was published by the FRB of Chicago. The workbook, about 40pp, also discusses deposit contraction. There’s even a little unintended humor to reward a skeptical reader.

http://en.wikisource.org/wiki/Modern_Money_Mechanics

The Fed would print the money

A pet peeve of mine is when a very complicated subject is muddled still further with a misleading phrase. In fact, the FR banks buy notes from the Bureau of Engraving and Printing, which is part of the Dept. of the Teasury. See the BEP’s website, http://www.moneyfactory.gov, where you can find an annual report with details, such as the quantity of notes requested by the FRS and the price per note charged by the BEP (which needs no appropriations from Congress). You’re looking for the “Chief Financial Officer Performance and Accountability Report”, or just “CFO Report”. It’s downloadable in PDF.