Let us assume, for purposes of discussion, that the amount of money loaned in the US last year was $10T.
Under the system you seem to be proposing, that would be probably <$1T/year.
The economy would utterly and totally collapse.
All I’m talking about is the volume of money available to be loaned, not whether its source or methods of distribution are right and proper.
But don't you see that the "source" of those assets are crucial? The creation of various "instruments" by banks - pure fantasies they would NEVER allow the little people to get away with - is how they've used the cover story of fractional banking to run wild. Yet you go to THEM for a loan, and its Real Property for collateral or hit the road.