Predicting Margin call, page-25

One curious effect of heavy short selling that concerns me is that it seems to increase the trading float of shares available to trade.
The first holder of the share that has been "borrowed" by a short seller and sold to a new owner still owns the share and counts it as his.

He probably doesn't even know it has been lent to a short seller by his broker. A few brokers do allow the owner to either allow lending or not, and some even pay a portion of the borrow fee to a client who has a margin acccount with them. However, what happens if that same share is now sold by another short seller to another retail shareholder who now has a long position in the stock? Can the new broker now lend that same share to another short seller for sale to another long retail stockholder?

As far as I can determine that single share can be used multiple times for shorting, in effect creating an extra share (not isssued by the company) each time. So if the stock is 20% shorted is the effective number of shares available for trading increased by 20% and does the market cap increase by 20% as well?

I know that the company only pays dividends on the shares actually issued by them and the short seller is responsible for paying any dividend declared on the borrowed stock but I am curious on how that works for a share which has been borrrowed and sold on more than once? Does anyone know?