Pericles,

You ask where the money comes from for the NBN. You keep making the assumption that money has to be created as a loan. It doesn't and for most of human history it wasn't a loan. Money is not the same as a loan and whomever is the "controller of the currency" can create as much money as they think fit. The banks have been given the responsibility of creating money (call it bank money if you like but it is still money). So the government can create as much money as they like without creating a loan.

You ask what is the difference between scheme 1 of the NBN and scheme 3

The difference is that in 1 the government would ask the banks to create loans and lend the money to the government or the government would collect extra taxes or the government would borrow the money from overseas - probably a bit of all. At the end the government would end up with a lot of debt and paying interest.

In the third approach the people would end up owning the network and there would be no debt because the government simply created the money and gave it out.

Daggett has it right. It is madness for the government to outsource the creation of extra money to the banks for new public assets. Let banks lend money that already exists but leave the creation of extra money to the government or alternatively the extra money created should be zero interest until it is first spent.

The government provides the rules the funds and governance is not the same as tax payer funded. Tax payer funded assumes that the money already exists before we start. In what I am talking about the money comes into existence as we build.

Yabby and Pericles, I really think you should go back and read the article again, and consequent comments.
The thrust of the argument is about the morality of introducing new money into the economy as debt.
Yabby responds by giving an example of overseas borrowing. (?)
No one is denying the existence of the money market; after all, if it didn't exist, we couldn't question the morality of it.
We are still all over simplifying. We haven't made any distinction between loan banking and deposit banking, cash on demand or term deposits, whether money deposited with banks should be considered a loan or a bailment, (ie, if it is your money, should it even be entered on the banks' balance sheet?).
If you are still stumbling over the multiplier effect, Pericles, you can look it up on your own Investopedia link; thanks for that, by the way.
If the Utube link I supplied was beneath your dignity, Pericles, perhaps I could recommend Murray Rothbard's “Mystery of Banking”. If you Google it, you'll have no trouble finding a free download. Rothbard was a staunch follower of Mises, and so was emphatically not a socialist by any stretch of the imagination. He gives an excellent history of the evolution of fractional reserve banking, from the outright embezzlement by the old gold and silversmiths.
What I find most curious is why no one has even attempted to address my concerns about the consequences of current banking practices; ongoing and inevitable inflation, debt relief for starving children, the continual widening of the gap between rich and poor...

*ongoing and inevitable inflation, debt relief for starving children, the continual widening of the gap between rich and poor...*

Deary me Grim, it sounds like you are mixing up all your social
concerns and just blaming it on those "evil bankers". Life
is more complicated then that.

I remind you that those countries with starving children, also run
large armies, not a cheap little joke. I remind you that many
countries with starving children like Congo, Ethiopia, Sudan,
and a number of others, are now leasing out large tracts of farmland
to China, or one of the Arab countries, so that they can grow food
for their own people, not the starving children.

If you really want to do something about starving children, then
you should be lobbying for some family planning aid for their
mothers, for many are still forced to pop em out like little rabbits,
due to a lack of family planning availability. Mr Bush thought
that preaching abstinence would do it, but its been a huge failure.

Today's Central Banks are kept at arms length from Govt, for very
good reasons! Politicians, deciding to give away printed money to
their favourite pork barrel, would be a disaster! Profits from
Central banks are still returned to treasuries as it is now.

The money supply has to grow, as economies grow, or you land up
with a credit squeeze. Credit in fact empowers little people to
have a go if they want, to start a business, build a house, you name
it. If there was no credit as it now, only the rich with cash
would hold the monopoly on assets, to become even richer, the poor
would simply work for them with little option. Now they have options,
due to our banking system.

Looks like a number of fronts opening up here

daggett claims that:

>>All the money in circulation (or, if we consider Australia and not the US, the 97% of the money in circulation that is not created as notes and coins) originates as debt.<<

What on earth does "orignates as debt" mean?

In the sense that anything that isn't actually in a physical form has to be recorded as a debit/credit transaction in the Bank's books, you could say that it "originates as debt"

But that would completely overlook the simultaneous creation of a credit transaction.

If you mean something else entirely, please explain. With actual examples, not theory.

Meanwhile Fickle Pickle is confusing himself even further.

>>Money is not the same as a loan and whomever is the "controller of the currency" can create as much money as they think fit.<<

But this isn't the case, FP. At the same time the money is created, by whomever, a corresponding liability is created. Or to be quite specific, when that money is put into circulation, a liability is registered. Otherwise, how would we know how much the government is in debt? How would we say to Kevin "you're creating a debt burden for our children" (which seems to be the catchcry) if we aren't able to keep track of it?

And Grim.

>>...whether money deposited with banks should be considered a loan or a bailment, (ie, if it is your money, should it even be entered on the banks' balance sheet?).<<

If they didn't record the amount, the money wouldn't be available to them to employ in the cause of earning interest for you.

If your question is "why Banks", we have a lot of ground to cover.

To start with, if you get your wages in cash, keep it in a tin, and only spend what you have earned, Banks would be superfluous.

But society has decided that it occasionally has needs that require money now, against a promise to repay later.

On this basis, Banking began.

Let me know if you need more information. I have plenty.

Yes war is terrible, Yabby, thank you for pointing that out to me.
The specific stat I posted was:
“For every $1 in aid a developing country receives, over $25 is spent on debt repayment. Children are dying, to pay off debt.”
I have to love this line of yours, Yabby:

“If there was no credit as it now, only the rich with cash would hold the monopoly on assets, to become even richer, the poor would simply work for them with little option.”

Gee, imagine a world like that.
It's an old and fairly accurate adage that 'banks only lend money to people who don't need it'. We used to have a bank of last resort (to customers); the CBFC. The other Neo Liberal party (so called Labor) decided we didn't need it.
Pericles, again you fail to discriminate between cash on demand, and savings deposits. Checking (cod) accounts attract little or no interest; more often a cost. In other words, in theory at least, the money in a check account should be exactly the same as keeping your money in a tin; it's there whenever you need it.
Except it isn't.
I imagine you know enough about business to agree that the very best financial situation for any business, is to have cash customers, and account creditors. You have cash deposits coming in daily, and up to 55 days to save for bills.
Fractional reserve or credit money banks are the exact opposite. Creditors can demand their deposits daily, whereas their 'customers' may not have to pay up for years. If you tried to run your business on that basis, you would be declared bankrupt.
I can already hear Yabby screaming, “that's why they charge interest, to offset the risk!”
What risk? Recent events demonstrate that while banks routinely post 'record' profits, on those occasions when they do post a loss, they get bailed out by tax dollars.
Except in Sharia, or venture capital banking, the great risk is taken by the customer, not the bank.

*Children are dying, to pay off debt.*

Grim, you are mixing up a mumbo jumbo of facts, to try and create
a tear jerker. Lets put it another way "Children are dying,
because Govts prefer to buy military equipment, rather then
feed them"

*It's an old and fairly accurate adage that 'banks only lend money to people who don't need it *

So Grim, are you telling me that young people don't need to buy houses,
that hard working tradies don't need a loan to start up
their businesses, that farmers don't need loans to plant crops?

I see this stuff every day, particularly compared to what things
were like, before deregulation of the banking system. I know,
I too was knocked back by banks, when I want cap in hand, asking
for a loan. The Govt bank knocked me back straight away. It
was a nice old bank manager at the Commercial Bank, later taken
over by Westpac, that saved me and gave me a chance. I still thank
him for it.

*Recent events demonstrate that while banks routinely post 'record' profits, on those occasions when they do post a loss, they get bailed out by tax dollars.*

Not quite correct. If you check out who got the biggest bail out,
it was AIG, an insurance company. Some mega banks, critical to the
economy as a whole, were loaned money, of which they have already
repaid 80 billion, with the rest not far away. Smaller banks still
fail all the time in the US, they close down and go broke.

If you are saying that the US Govt should have let the whole
financial system collapse, well the cost to citizens would have
been enormous. This way, what was loaned to big banks, taxpayers
will actually make a profit on that money.