Tom Woods has had a few rounds of debate with Ellen Brown.
Concerning the article you link to she makes the following errors:
1. Banks cannot lend out their “required reserves” but they can lend out their “excess reserves.” On August 1, 2008, banks were holding some $44 billion in RR and less than $2 billion in ER. On August 1, 2012 they were holding $104 billion in RR and $1,500 billion in ER. Not only can they lend out their ER, but they can convert them to RR by creating credit with the issue of fiduciary media (i.e., checking account balances not backed with reserves). The ratio of reserves to checking account balances is around 5%. So banks can issue 20 times the amount of checking account balances than they have reserves. This means $30 trillion of M1 money when M1 on Sept. 10, 2012 was $2.4 trillion.
2. More money in the economy does not generate prosperity. Viable production depends on the spread between selling prices of outputs and buying prices of inputs. Additional money, no matter who gets it first, will be spent on all goods and factors of production. If homeowners and students get the new money first, entrepreneurs receive it next when the homeowners and students spent it to buy their products. Entrepreneurs spend the new money on factors of production, bidding up their prices.
Prosperity is generated by arranging production processes to best satisfy our demands as consumers. For that, we need a market economy.
3. The highest level M1 reached in 2008 was $1.6 trillion. The highest level for M2 was $8.2 trillion on Dec. 29. On Sept. 10,2012, M2 was $10.1 trillion.
Clearly, the money stock has not fallen since 2008.