Criticisms
The real bills doctrine was discredited largely because of the writings of Henry Thornton (1801), David Ricardo (1810), and Lloyd Mints (1945). Each of these writers claimed that the real bills doctrine placed no effective limit on the amount of money that banks might create. While Mints, for example, was willing to admit that money issued in exchange for a given physical amount of assets will not cause inflation, he claimed that money issued for a given money's worth of assets presents the possibility that the new money will cause inflation, thus diminishing the real value of each borrower's debt, and allowing them to borrow still more. The result would be a self-perpetuating cycle of more loans, more money, and more inflation.
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