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"There is an option to fund overnment expenditure, which has the advantage of no quantity crowding out, but also does not suffer from the disadvantage of incurring debt. It is thus the most desirable, efficient and equitable method: this is the option for governments to create money directly and use it to fund their expenditures, just as Kublai Khan did in thirteenth-century China, or as the US government did during several stages of its history. I these cases, no debt is incurred, and no interest liabilities weigh on future generations of taxpayers.
Indeed, the US Constitution, largely under the influence of Thomas Jefferson ( an opponent of privately-owned central banks), explicitly reserved the right of money creation for the US government. Since the creation of the privately-owned Federal Reserve banks in 1913, this option was increasingly avoided, thus incurring significant government debt and substantial interest liabilities.
One of the few presidents to challenge the de facto monopoly to create credit that the banking system and the Federal Reserve banks enjoy was John F. Kennedy, who ordered the issuance of "United States Notes" in 1963 with one of his last executive orders. This government money had the same design as the more common "Federal Reserve Notes", but instead was entitled "United States Notes". Further, it was only graced by the seal of the US Treasury, and did not ahve any seal linked to the Federal Reserve system. After Kennedy's death this practice has not been repeated.
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however: (...) only about 5% of all transactions make use of paper money. Therefore, an miprove version of this fundng policy, which allows government to create larger volumes of credit, would be for the Fiannce Mnistry (or, in the case of the US, the Treasury) to institute credit creation on its own accounts, the same way that currently the central banks and commercial banks create credit. This cold be achieved if Milton Friedman's advice was heeded, (...), namely to fold the fucntions of the central bank into the Treasury, by rendering "the Federal Reserve a buerau in the Treasury under the secretary of the Teasury"".
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