Over at the God's Politics Blog, which really has become the "Worship Obama" blog, God now has weighed in on money creation and it seems that God does not like it except when it is done by the Federal Reserve, since government creates new money for our own good.

Bob Goudzwaard and Elizabeth Palmberg rightly point out that there is a real problem with fractional reserve banking (which is surprising in itself, but as I read on, I realize where they are headed). However, their solution is not honest money, but rather to demand government have even more power:

Why should we care whether money is created by governments or by banks? Well, when money creation is mainly in the hands of private banks rather than the Federal Bank or the Treasury (which can create its own bills or papers), an important side effect of this system is that, if there is not any kind of control, way too much money may be poured into financial “casino capitalism.” Too many of those money-“creating” loans can go to people who use them to buy Wall Street inventions like derivatives – things that are tenuously, if at all, connected to or productive in the real world. As the article in this month’s Sojourners, A Paper God, describes, these abstruse financial speculations drive the real economy in ways that are bad for the environment and humans.

They also create financial bubbles which, when they pop (and the brilliant new Wall Street investments become “toxic assets”), take the whole economy down with them. In contrast, when money is created by governments, they insert the created money into the system at a different place – i.e., the federal budget, to form a base of the government’s spending on real things (salaries, roads, health care, etc.).

If the total annual money “created” is two, three, or even four times the growth of the real economy, then we need to understand that an illusion is working and a breakdown will follow, like the downfall of an idol.

They are right about fractional reserve banking, but then they add this gem:

In the past governments understood, far better than most present governments, that adding money to an economy is a public act and so needs to remain under public control. So the central banking system should always – indeed, it is its public calling to – put some limits on the growth of bank-“created” money.

So, as long as government is doing the counterfeiting, it is not idolatry. You can't make up this stuff.