As Herman Daly proposes, such issuance of liquidity could be part of the duties of the state. Indeed such a direct issuance of the money (instead of allowing banks to create money through a monetization of our personal credit) would be much better than what we have today. Money would be plentiful and could be calibrated to match the economy’s need by watching the index of prices.

There are other ways, for instance we could grant each other credit without intermediation of and control by the state, as in some local currencies and early thoughts on the Ripple system. The bank created money that must be serviced with perpetual interest payments is the worst system we could have, but of course it’s a boon for the banks. That makes de Ruijter’s doubts about the doability of a full reserve requirement somewhat understandable. Banks would suffer a great setback as they’d lose a fast-and-easy way of making money our of basically nothing.