Jon, it sounds like your complaint is not about fractional reserve banking per se, but rather has to do with the federal government's power/practices regarding taxation, borrowing, and legal tender.
Why do we need legal tender laws at all, at any level of government? Wouldn't the common law produce adequate default rules for settling debts?
I don't have any problem with government borrowing per se, as we cannot abolish the government's need for amortizable goods. Fix the taxation problem, and the borrowing problem pretty much takes care of itself.
