I agree that interest can be a good thing. But fractional reserve in my opinion is the root of the problem in the current system. That means that the banks themselves are responsible and are the ones in control of the money supply. It means they get first dibs on money and it means that they will resurge as another elite banker class.
On the other hand if you remove fractional reserve lending and actually only lent what you had and paid depositors interest on their deposits you would not be creating new money and you would actually be a facilitator of economic growth. Borrowers would pay interest on money that they needed for investments. Banks would be more prudent and wouldn't give home loans or stupid unpayble loans on risky investments or gambles because they would actually have to fund the liabilities of deposits if their clients didn't pay back their loans. Finally, the depositor would make some interest on his money instead of lending it to his uncle jimbo for his great new maple syrup conglomerate that might not make a profit or even produce a pint of maple syrup.
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