When the bubble is inflating, the balance sheet shows credit-money lent out as positive, an asset, equity, etc. When the bubble pops, it becomes negative, a liability eating equity even to the point of insolvency. What Ellen's book has done has positioned Ellen to think that at the moment of creation of credit-money, the bank is simultaneously having to enter whatever it takes to bring that into balance regardless of which side of the bubble we're on. Every credit-money-loan entry into the ledger though does not require a corresponding negative entry such that the bottom line remains a sign of equilibrium. The bottom line changes even though credits and debits are entered at the same time and always.
Double-entry is not equivalent to static equity. Assets go up when credit-money is created out of thin air on the up side of the cycle. Liabilities do not go up in unison.
There is risk for the poor and middle class, but the big banks have been counting on the Treasury in the banks' calculations for decades. Consequently, when did the big banks actually find themselves in bad circumstances in their view? How much heat are they really feeling? What's their real long-term plan for us?
You said, "Once more, with enthusiasm : under fractional-reserve banking, each of those loans created a checking account deposit; the checks written on each depositor's checking account are funded by the original loan; each of those loans was NOT borrowed and as a result, NO bank owes 'that money back' to anybody, except to its loan account, which the borrower must repay, regardless of the use of the loan funds, and which account is used to repay the loan.
The only lenders and borrowers in the chain are the bank-lenders and customer-borrowers.
"To Tom, if Ellen is not able to see the reality of what you have written and my 'rudeness', then the Kucinich Bill is in jeopardy for no good reason."
Look, you are right about the money that banks lend out not being "owed" to anyone for the most part. There are indirect costs/debts, but they are small due to fractional-leverage.
They are gambling with free chips they've made themselves.
That's what Ellen doesn't see, at least hadn't been seeing. I believe she is beginning to see it. The only things the banks have had to worry about are the degree of leverage, the timing, and whether they'd be bailed out if and when. The banks that played it safe, stayed small.
I'm saying all of this so you will see I get it perhaps more than you've realized. I've known all of this for decades. I was a New Dealer before my teens and have worked to one degree or another in every segment of FIRE and then some.
As to your second point, I think you need to hear what Ellen is saying beyond what you see as her blockage. She's not out and about badmouthing the bill. In fact, she's made it clear here that she wishes what she had said in private had not been leaked. Now, if you mean that you want her voice as an ally championing the bill and that the only way that can possibly happen is by Ellen seeing that the bill isn't broken in terms of the "double jeopardy" aspect (over and above the fact that the bill doesn't adequately discuss clearing and settlement), then I take your point. It would be good to have Ellen talking up the bill without the qualifying language that there is that particular "double jeopardy" when, in fact, there is not. I think she will stop saying that now.
Here's what I think though, none of us should burn bridges here; and that's the least of it.
I believe Ellen should not do public banking to the exclusion of the NEED Act. We aren't saying it will pass right now. We are saying it will pass later in one form or another because the banksters have gotten themselves in deeper than they realized we'd catch on and expose it so much.
As for you, Joe, I think you need to stop seeing public banking as a potential delaying tactic concerning the thrust of the NEED Act. It doesn't have to be that at all, and Ellen certainly learns and grows with the rest of us. She can speak for herself, of course, but I'm hazarding a number of things here concerning her. She can disabuse me of my notions anytime. What I think is that Ellen can shape the Public-Banking Movement to fully jibe with United States Money (meaning lending actual dollars –- of which there will be plenty -- and not leveraging even 1:1 – no reserves, no multiplier), which would be a very good thing. It would be synergistic. The NEED Act would be made hugely more muscular were it to have a strong federal-public-banking component and vice versa. Public banking would get a new comprehensiveness to it. That would help breathe more air into both.
The more comprehensive the Act, the better it is as a talking point to show how all of these segments and sectors really are not independent at all. When America sneezes, the world catches a cold. When China gets good and sick, when its bad environmental policies and insane building craze catch up with it, it too will make the world sicker. We need to work together to head all of it off at the pass.
So, what I'm asking for here is greater collegiality and sense of common purpose and a greater sense of urgency.