I have a question about money needed in our economy....?

Question

And I know it may sound stupid but I want to know if anyone knows the answer b/c most people don't seem to be able to really give me a good one or one at all.

If we "print" money & the economy needs money why can't we print more money to help get us out of the recession were in.

Answer 1

Printing more does nothing but increase the recession, one of the reasons why things are as bad as they are is because of p**s Poor Prior Planning.  We need stability, not more instability which is what this (mis) administration has provided us with.

Answer 2

Inflation is the just the supply and demand of money. The less money flowing through the economic system the more demand, which translates into more value for your dollar.

The more money in the system, relieves the strain on demand and devalues the dollar.

If you have a job today, making just for example $5.00/hour and you go to the store to buy milk that by chance cost $5.00/gallon. You have a 1:1 trade off. One hours of your work = 1 gallon of someone else's milk.

If the Federal government decides to just randomly print more money. They make money easier to get. Which means more people have $5.00. More people having $5.00 means more people can buy milk at $5.00/gallon. But, not only does money work on supply and demand, but so does milk.

More people buy milk the more demand. The more demand, the more the cost will go up. Eventually, while you are making the same $5.00/hour at work - you will go to the store and find out the milk you paid $5.00 for last week will to cost you say $5.35/gallon today. Thus making you have to work more than an hour to buy milk.

You have just ran into INFLATION.

Answer 3

When the government prints an excess of money and introduces it into the economy, it devalues the existing money and causes inflation.  We are in an economic slowdown and not a recession because we have not had the requisite consecutive quarters of economic retreat.

Answer 4

Most certainly is not a stupid question when intend to learn more.

When you print too much money you have inflation.

Inflation means essentially too much money chasing after too few goods.  The result--prices rise.

Oil is denominated in dollars and OPEC pegs to the dollar.  When we see inflation, the dollar amount for oil rises because it takes more dollars to get the same amount of value.. ..savvy?

Inflation and growth are ok.  When you have inflation and a stagnant or receding economy.. then you need to worry.  Stagflation (rising inflation, rising unemployment) bodes ill.

To read up on inflation I recommend:

http://inflationdata.com/inflation/Artic...

Inflation is essentially a tax.  Why?  Well it means your dollars are worth less.  The money you earned in the past is not worth as much today.