Ah. Investopedia, the Picture Dictionary of economics. Not a great source of information.
But they are correct on some of what they say. The Fed does create reserves by buying bonds (or other assets) by marking up the reserve accounts of banks, thus creating new reserves. (No mention of any limitations here, btw.)
Where they get it wrong, very wrong, is their claim that banks then go on to lend out these reserves. They do not. Reserves are used for interbank settlement, and for satisfying customer demands to hold cash. That's it. Banks create new M1 money by creating loans 100% from credit. Reserves play no role here until it's time for interbank settlement. Banks create new money much like the Fed does - by buying assets in return for account balances. You get a loan, the bank buys your promissory note.
Here is another good article that explains away the fractional reserve idea pretty clearly. Carney gets into capital requirements, reserve requirements (written when we still had one), and bank accounting in general.
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The reason I'm going through all of this trouble is to establish (for the sake of the thread) that money is not a limited resource, and it's pretty easy to create, both by the government and by banks.
Nor is the money in our bank accounts somehow "recycled" into the economy. It just sits there (just numbers, really) until we decide to spend it. It's important to understand that the income we don't spend or invest does nothing for the economy, and is in fact a demand leakage.
This matters when you consider the circular flow of income in the investment-production-consumption cycle. The money that moves through the economy, buys our stuff, pays our bills, and invests in future production comes from our past production, which is our income. If we spend 100% of our income on consuming our production, that's enough for 0% growth, a steady state - but we never spend 100% of our income. We save some of our income, which is good for the individual who is saving, but bad for the economy in the aggregate. That lost demand must be made up for, through increased private sector debt, federal deficit spending, or both. That's how we grow the economy; and here in the U.S., where we always run a significant trade deficit, federal deficit spending is an absolute necessity.
That's why I said earlier that no matter how you shuffle around tax burdens and spending within a balanced budget, you are still going to end up killing the economy. Certainly there are better tax-and-spend options to talk about, options that give us the greatest benefits for the least tax burden, but you still need that deficit for the sake of maintaining/growing GDP.