It seems that money creation would be tied to new loans no matter what. A first run through the paper seems to explain the '90s S&L crisis more than it does 2008 - the S&Ls were closer to the ILF model than the FMC model.
It needs to be issued against productive endeavour. Banks issue against land ramping up prices and in doing so they effectively grab themselves a piece of our labour by forcing us to pay a greater share of our income to them via usury.
Usury is One of Those Words. I don't know how a debt instrument needs a distinction like that.
Our culture is such that we cannot make basic distinctions between rents in general and productive work. I suspect we'd have to fix that, then let the existing accounting mechanisms sort it out.
I'll have to chew on that a bit. Thanks.