Making money to ease national debt?

Question

I have heard a lot about countries being in debt, but I know that obviously countries can print their own money. So can anyone explain in an uncomplicated way why they can't solve these problems like this. I know it has something to do with inflation.

Answer 1

The US dollar is the Worlds Reserve Currency (look up Bretton Woods for the history http://en.wikipedia.org/wiki/Bretton_Woo... )

The US is the only nation that pays debt in its own currency. All others pay in US dollars.

Inflation is the increase in the supply of money. No currency is on a gold standard. Only the Euro is backed by 30% gold reserves.

Inflation is a tax. It is the most regressive tax you can have. It destroys savings and wealth. The current system is designed to conficate wealth. Even Greenspan said this.

In 1966, Alan Greenspan published an essay called “Gold and Economic Freedom,” certain words from which have been reverberating throughout libertarian circles since he started working for the government.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation [he wrote]. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold . . . The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves . . .

Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.

http://www.strike-the-root.com/51/smith/...

Answer 2

the money that you MAKE printing it is only toilet paper is it is not backed by the gold reserve and the balance this country have in his international trade,and the productivity of this country, that is why Uganda have bills made for a value of on million of what ever there money is call against one dollar

Answer 3

If you print more money, then the total amount of money in the economy increases, right?

But that means that money is easier to get, which in turn means that the money is worth less than it was before.

Printing more money without a corresponding increase of wealth in the economy just causes money to be worth less than it was before. Money just represents wealth, it isn't wealth unto itself.

Answer 4

countries in debt owe other countries money, but obviously cant pay in thier currency they have to pay in gold. so printing money wont help

Answer 5

All natural resources In the US have been used as collateral for the countries debt . As well as it's citizens . Almost 500,000.oo dollars per person is owed other countries . Do I hear slavery country here ?

Answer 6

Money is just IOU notes that promise to deliver goods and services upon request.  These promises are backed by the government and by law.  Which adds credibility to these promises and allows the people to have some confidence that these promises are true.

But these promises can only be true as long as there are enough goods and services in the economy to be exchanged for the money.  If the government starts printing lots of money and in effect starts making all kinds of promises that cannot possibly be fulfilled.  Then people will rush to spend their money and get their promises fulfilled before other people will try to do the same.  And this in effect will increase the demand for goods and services and decrease the supply for those who are not quick enough to get their promises fulfilled.  Prices go up as a result.  The purchasing value of money goes down.  And you have price inflation.

When the government starts playing around with solemn promises to deliver goods and services, which is money.  Then people begin to loose their faith in these promises.  They begin to avoid using money and instead put their wealth into physical goods that have real value and not just empty promises.  And this is usually bad for the economy because people are less willing to accept money in exchange for goods and services.  Quite often people end up not exchanging goods and services even when they need to.

Answer 7

Printing more money only makes things worse.  It increases inflation.  It may help short-term in getting more money to people, but in the end it will come back and bite hard.  Here's why.  When money is printed, the more that is pritned, the more that a currency loses value.  Small to moderate (not overly) amounts pritned is okay.  However, when a country uses it to solve economic problems or other things and mass prints, consequences occur.  The currency loses its value.  So it becomes more expensive to buy things...that's why it will cost a lot of money to buy something that didn't cost much years ago.  This bad mistake has been made a lot in history.

German officials printed out much German currency.  The Mark was printed a lot.  However that created problems- not enough money could be printed because inflation became extremely high.

Zimbabwe is a very modern example of why printing currency fails.  They printed out so much..and inflation is really high- things are worth a lot.  People are poor and inflation is high and money is small-value in Zimbabwe.

The US has also lost value in its currency..but its not close (far from that) from Germany and Zimbabwe...(Germany in past). Hopefully they won't print out lots of currency- I think they know better.,

Answer 8

If the I.R.S. can lower the amount on debts owed to them by those  who are in the higher debt level like the USA has been then why can't they figure out a way to lower the national debt instead of bringing such poverty upon the people.

Answer 9

They can only print the same amount of money to the value of the gold they have in stock.

Answer 10

Imagine if money grew on trees.   At first we'd be OK - one leaf per item.  But someone who wants the item more could offer two leaves. The price of the item would keep going up, because there's no limit to the amount of leaves available, and a single leaf would buy less and less.  

If you buy something from me for 100 dollars, and we agree you're not going to pay until next year, I want the 100 dollars to buy as much next year as it does this year.   If the US prints more dollars in the mean time, more people will have  dollars, prices will go up, and my 100 dollars will be worth less.  

Next time you want to buy something I wouldn't want dollars, so you'd either have to pay me more, or pay me some other way.