If the government makes the money, can't they just make an abundance load of it, and just pay off debts, etc.?

Question

That's what confuses me. Doesn't the government make the country's currency? So why don't they just print out a whole !@#$% of it, and just pay everything off? A lot of problems that we're going through could be solved by this, couldn't it?

Or have I been mislead about where our currency comes from?And if so, where DOES it come from and couldn't they solve it?

Can someone explain all of this to me? Be detailed... thank you. :D

Answer 1

you cant just make the money and use it there has to be something behind the money to make it worth something i learned that last year in 7th grade

Answer 2

Well, suppose there's a lot more money around, which makes its way to debtholders - but YOU didn't get any of it.

With lots more money chasing the same amount of goods, prices will go up.  But YOU have the same amount of money you had before, so YOU are going to have problems buying what you need.

Answer 3

Printing money doesn't make it worth anything.   In Germany before WWII they had plenty of currency, but it was worth so little that it was said some people wall-papered their outhouses with it.  If we flooded the nation with more printed money, its value would go down and businesses would charge twice or three times the amount for their goods because the value of the dollars would be so diminished.  So we couldn't pay anything off by simply printing more money.  It would just be worthless paper.

Answer 4

Traditionally the paper money you have in your wallet represented gold reserves locked up in places like Fort Knox. So, first, think about any government being limited to how much they print based on how much they have stored away. This was called the Gold Standard. Controversially, Richard Nixon took the US off the gold standard because the government didn't have enough money to wage war against Vietnam. The US, like the French before us, were losing, and we didn't have enough gold to pay for the war. So he did what you suggest. Henceforth, the money you have in your wallet is only supported by FAITH, belief in your government by YOU and by other global traders. Nothing more. The dollar is a FIAT currency. After WWI, Germany was in such a bad state due to the bad terms of the treaty of Versailles it printed more money in hopes of getting ahead. Since it had nothing to show for the money, it was LITERALLY burned to warm homes in the winter. In the case of Nixon and Germany printing money recklessly is like borrowing money from a credit card, but you and I pay it back. The US recession was the result of Nixon since the Vietnamese kicked the US ***; Hitler resulted in a demoralized, impoverished Germany.

Answer 5

That is what some is happening in some African countries now, what this causes is hyper inflation, which devalues the currency.  Imagine for a moment that apples are dollars, so if we have millions of apples there isn't much demand for more so the value they have is less and so on.

The only way is to close the market, like the soviet union or something where the currency is worthless outside, also where there are no imports or exports, but in a modern economic environment this is pretty much impossible, as every country needs trade for food or materials for existence.

Answer 6

The government has a budget and it is supposed to be based on the taxes we pay.  If they spend/make more money than we pay in then they go into debt.  If they just arbitrarily make money and use it to pay things off then it loses its value.

j