WHEN BANKS "CREATE MONEY," DON'T THEY, IN REALITY, JUST RECYCLE THE MONEY AROUND?no new money (cash) has been created. People are taking money...

Especially in today's world, the amount of cash in the
system is relatively irrelevant to the concept of money supply.   We use electronic
transactions for so many things that the amount of cash compared to the amount of liquid
money is really quite small.  So I would say you should not think about cash in this
context.

When banks create money, they really create
money.  When I deposit my money and they loan some of it out to you, there is more
liquid money than there was before they loaned it to you.  It is not just
recycled.

If I deposit $1000 from a paycheck and $900 of it
gets loaned to you, where did that $900 come from?  It's not coming out of my money
because I still have $1000 in the bank.  It's not coming out of the money that anyone
else has -- the loan to you does not decrease the balance in the account of any other
depositor.

So you can't say it's recycled -- it is new
money created by the loan.

The actual physical cash is, of
course, recycled.  And banks don't create physical cash.  But they do creat
money.