Can you explain how - a government - can be in debt and be the sole creator of money ?

Question

Does the government print money ?

Does the government create money ?

If so - and the government in soley responsible for how much money is in circulation at any given time

How can that government "run out " of cash and need to borrow it ?

-------------

If another force group or entity creates money - then aren't all elections held under false pretence ?

If another group that is not the government creates money then that group owns the government

Since the people believe that the governement runs the nation and that is why they vote - in order to choose the path of the nation - how are elections anything but a cheap fraud if that government is owned by someone(s) who create and control the money of the nation ?

Answer 1

This is basic high school economics.  Go get a simple easy starter economics book made for an 8th grader and give it a read.  This will help you tremendously in life.  Not just economics or money though the concept of supply and demand can help explain the fast majority of issues on all levels.  

If a gov't prints money there is more money and therefore the money is worth less than before and this causes inflation.  You are correct the gov't does print money though the gov't does not decide the value of the money the market decides the value of money and that is far more important.  Everything is relative and you need a stable balance for the economy to function properly and to keep the item of exchange (money) worth the stated amount and not have people revert to a true barter system.  Just printing money does have a very short lived benefit to the gov't though the instability of inflation makes it detrimental to the economy and therefore the gov't as a whole.

Answer 2

The money printed in the US is not government money.   It is printed by the Federal Reserve (created by the Fed Reseerve act of 1913) which is a group of private banks (bankers).  This was to offset the ups and downs of government currency which was backed by a gold standard.  The Fed Reserve prints money that is debt backed.   This means that for every dollar printed, the US tax payer owes 10% interest on each of those dollars.   So basicly when you are paying taxes, it is mostly to pay back the Federal Reserve and their Fiat money as opposed to funding government programs.   Since the Fed prints large ammounts of money, this does 2 things.    First, it creates debt in the form of interest needed to be paid on every dollar (which is one of the reasons we are in debt.)  It also creates inflation that rises or falls depending upon the ammount of currency in circulation.   Since the US is trying to fund a war on 2 fronts that are both sucking about 12 billion dollars a month in funding, the Fed has been in hyperdrive.   This in turn causes a rise in iflation and devalues the dollar.   This is also one reason why gas is now so expensive.   its not that you are paying more but you are using an inflated currency to equal the ammount it would have been worth prior to inflation.   Since the rate of inflation would cripple the country beyond belief if the Fed decided to print the trillions needed to run the country and its 2 wars each year, the US government also borrows from foreign countries.   Recently, we borrowed money from China to fund the stimulus package, or as I like to call them "reparations checks".    Why do you think they wanted you to spend it on goods and not bills?    You get money from China, spend it on Chinese made goods and thats less the Govt. has to repay them.   Basicly it was empty money.  Since the introduction of the Fed Reserve, there has been nothing but problems and the National Debt continues to climb.   A return to the gold standard and the use of Austrian Economics or keynesian economis would be a much smarter choice as well as free market economies.    Government regulation and private banks pulling the strings have harmed us more than helped.

Answer 3

The people, or banks that lend the money tent to be gouvermental banks. Here in Canada, the gouvernement borrows money from the Bank of Canada. The gouvenement must then pay it back, its like a loan. The bank does not own the gouvenement, but rather "buys stocks" in it. The gouvernement can only print so much money at the mint, otherwise the dollar falls (like in the US) and can later be valued at nothing.

It all depends on the economy. For example, oil is worth more now, and Canada has billions of litres of it. Since we have it, our economy is stronger and therefor the dollar goes up. The economy decides the amount of money that can be printed.

Answer 4

Lol

WOW you need INFO

First off, Our government Doesn't even own its own money.

It is on loan by the Federal Reserve, Which by the way is not Federally owned at all.

Secondly, the federal reserve charges us interest on every dollar printed.

So if you only printed back 1 dollar how would you ever pay back 1.01 dollars.

You cant.

So every dollar printed puts us further in debt.

And yes you are right.

Remember the GOLDEN RULE, "Whoever has the GOLD makes the RULES"

You are right we are owned by the Wealthy Elite Banker

And in a for of INDENTURED SERVITUDE, or Slavery we exist.

By the way,

JP MORGAN, who is a founder along with Rockefeller, or the CFR (Council of Foreign Relations) Who by the way John McCain and Barack Obama Are both members of, started the IRS in the first place.

You might want to do some research on that.

How does it feel, to know that your Government souled itself to the Wealthy and Elite bankers of YesterYear?

a few links to get you started

Type in Federal Reserve and see what you get.

Also try CFR

GOOD LUCK

.........................................

Answer 5

I'm not sure about Canada . . . but the U.S.  government does not create money . . . see Federal Reserve . . .

Answer 6

i don't think it is a matter of fiat money or not...maybe partially but inflation is a one of the worst thing that can happen to a country and can make things worst and very fast!

Answer 7

I dont feel like answering the whole question but i Will say our money is based on the gold reserve we have. If more money were just printed inflation would go through the roof.

Answer 8

you can't just "print" more money when you run out bozo

Answer 9

The Treasury prints money, in response to the demand for it, as determined by many factors.  But, they don't print it just because the Congress authorizes the spending thereof.

The debt is created by the Treasury selling bonds.  Savings bonds, I-bonds, T-bonds, T-bills, and other securities are sold at auction to investors.

I happen to own a lot of savings bonds.  I 'own' part of the debt the US has.  I am a creditor to the United States (albiet a very small one).  I trust that the US will pay me back with interest when the bonds come due.  

.

Answer 10

Money is created in mints by the nation. The reason the government creates money and yet is in debt is for 3 reasons. 1) The money they make is used if they're in debt 2) If they create more money to have it then the currency would be worth less via inflation 3) Money is relative. So if $1=2 euros, then if the gov borrows from Germany and when the US repays it $1=3 euros, they owe more money to Germany.

Answer 11

INFLATION!!!!  a country cant just make money, It has to have gold to back the money.

Answer 12

You wouldn't be strong enough to carry enough to buy a loaf of bread.

Answer 13

ive been wondering that for years now but im sorry i dont have the answer

Answer 14

Money is only a token of the wealth of the country - if you print more of it you debase the worth of the token so you can buy less with it. Money is a way of simplifying the barter system

If you have a 10 loaves of bread you can swap them for a pig. Now make the bread worth one token and you can spend the 10 tokens on one pig. But if you make more tokens so you have a hundred of them the pig farmer is not going to give you 10 pigs because your tokens are now worth only a tenth of a loaf. Or the pig farmer can raise his price for a pig to a hundred tokens so he can still aford your 10 loaves..

This in essence is what happens a governement starts printing money, because they have to barter their goods and services against those of other countries. And as the government is printing money that is not backed by an increase in material wealth, then everyone in that country  starts pushing up their prices to afford the same goods as before - inflation.

There are a few  governments in the world printing money - they have galloping inflation and their currency is practically worthless.

Answer 15

Under the New Deal, Nixon ended the use of the Gold Standard (the U.S. does NOT have to have the gold on hand to back up currency, just think of how much money is floating around out there).

If we printed more money, then the dollar would become undervalued, meaning that prices would go up (inflation).

No other group or entity legally prints money, just the Federal Government's appointed designees (like the Mint).

The economy is essentially free market, meaning controlled by the consumers and regulated by the government. It has very little to do with elections.

Answer 16

The Fed, a dubious institution at best orders it to be printed, if they print too much then we get inflation or selling treasury bonds. The gold reserves are a miniscule part- there isn't enough gold in the world to back dollar supply. Its' largely based on faith and belief in buying power given the value of assets, income in the U.S.

Answer 17

yes the govt (well federal reserve really) prints money but it has to have the gold to back up the printed money!

all you see is the paper product, you don't see the gold reserve that the government has to cover all the money printed.

Answer 18

It is just paper, no longer backed by gold. So technically that 20 dollar bill is just some paper and ink and has no real value.

Government can not make more money because it will cause inflation and ruin the economy.

Currently we are 9 trillion dollars in debt. but it isn't necessarily a bad thing. We borrow the money through ourselves (bonds) and the government ALWAYS pays back their loans on time.

If you get a savings bond you are lending money to the government that they will pay back to you whenever you want it. If the government does not have the money they just borrow more money. So there is no harm done if everyone is paid when they want and we can always borrow from ourselves.

It would be bad to pay back the 9 trillion dollar debt all at once because then the economy would go into a 500% + inflation rise. That would be devastating.

The more money we put into the economy the higher the prices for everyday items will rise. The governement carefully  watches the economy and can even take money out of the economy to reduce inflation by having banks keep it.

Answer 19

EXACTELY!! WHY DONT THEY PRINT OUT MONEY TO PAY OFF THE DEBT WE A CAUGHT IN BECAUSE OF "WAR"! OH THANK YOU FOR ASKING THIS.I CANT WAIT TO SEE EVERYONE ANSWER.I GAURATEE SOME WILL BE HATEFUL,SORRY...OH! A SHINY STAR FOR YOU.  GREAT QUESTION!

Answer 20

Interesting question.  When I've asked people this b4 it seems the answer is bc money is actually backed by gold, so there has to be gold behind it to make it valuable.  They can't just print a bunch.

Answer 21

the Federal Reserve prints money. It's a group of private banks that's no more federal than Federal Express.

The Fed loans the government money. The government has to pay it back with interest.

It's a crazy system. Some say it even violates the Constitution.

I doubt there is enough gold to back up all that paper.

Answer 22

You're talking about the Federal Reserve Bank who took over our country in 1913 and prints our money and then LOANS it to us AT INTEREST. We live in a debt economy where we have to borrow our money from this criminal bank to pay back their loan which creates more debt. It's insanity and you can thank Woodrow Wilson for letting it happen. He said how much he regretted it, but politican criminals always apologise after their crime and then say there is nothing they can do about it now.

Answer 23

The federal reserve, US Mint, BEP control the money, and if there isnt enough money, they will just print more. AND if the money isnt balanced against gold or other materials, it will become worthless. An example, during WW2, Germany printed tons of money to pay for different things, by the end of the war, there were pictures of children building playhouses out of bricks of money.

Answer 24

Our Government does not print money.  The FEDERAL RESERVE prints money that we do not have.  The Federal Reserve is NOT a government institution.

Answer 25

If the government makes a ridiculous amount of money and spends it all. The Value of the American dollar will drop. So make billions and billions of dollars but it won't help. I make enough money but when the money loses value and I still make the same amount I'm screwed. This would happen to everyone. So what I'm trying to say is if the government makes a whole bunch of money it would really just be s******g over a good amount of people.

Answer 26

The more money the government creates the less the dollar is worth. That is why the value of our dollar is falling. The govn't has started creating money with nothing to back it up. The dollar in and of itself isn't worth anything. There has to be gold to back it up. Gold is what's valuable. A dollar is like a token.

Answer 27

inflation

Answer 28

The Federal Reserve is only supposed to print money that we have a gold reserve to back up.

President Bush may be able to clue you as to why we are SO FAR IN DEBT....of course, he may not be too concerned as his pocketbook isn't hurting....and he's walking away from the huge mess he created shortly anyway.

Here's a running total of what we are spending on the war in Iraq -- http://www.nationalpriorities.org/costof...

Answer 29

money is printed by government,



used to be that "money" was backed by a form of real wealth such as gold or silver, now money is just a promise of value

the citizens make wealth, the government makes money

when the government makes more money, and if the total wealth remains the same, the value of the money in circulation goes down

so they must tred lightly, and balance the risk/benefit of creating more money and making all of it less valuable, or borrowing money (treasury bonds etc) and then having to pay more back but in the future

or default on the whold scam and have recession where everything "resets"

Answer 30

i can say this if McCain is elected president the dollar will continue to depreciate . we will be walking around with thousands or worthless dollar bill like the one in Iraq with Saddam face on it .

Answer 31

PLEASE don't go there.

Surely you arent saying 'just print more'?

Because they do far too much of that and it is just as much a 'tax' as any other since it devalues every dollar you and I earn or save.

Note that the price of oil has been flat against the price of gold.

It is the value of the dollar that is going down.

Don't blame me -- I voted for Ron Paul.