As far as I have seen, no one has offered any solution to the credit crunch that makes any sense. Frankly, I am beginning to think there is no palatable solution. However, let's look at the plans that have been offered to see what the problems are.
First -- let's see what the basic problem is. US banks (and every other bank out there) use a fractional reserve system:
Fractional-reserve banking is the banking practice in which banks are required...
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