What would happen if the USA started printing and backing it's own money again ?

Question

instead of borrowing every single cent?

Answer 1

we have some deep issues. maybe the Dem's can make a CHANGE.

Answer 2

it would be worth a lot less very quickly

Answer 3

What the h**l are you talking about?

Please read at least one article on "monetary policy, History of", or maybe "U.S. Treasury",  before repeating some stupid statement you heard somewhere by someone of even greater ignorance than yourself.

And, FYI, American currency IS "backed".  By the Full Faith and Credit of the United States of America.  That is sufficient to make it the de facto world currency. (in other words, there is nothing we could "back" it with that would make it better than it is.)

And, by the way to the "gold bugs".  If the United States purchased all the gold in existence, and probably all the silver too, it would be a fraction of the amount of dollars in circulation.  This would cause a dollar bill to be valuable enough money to buy a small town.

Answer 4

Probably not a whole lot considering that the cost of gold and other precious metals has tripled since 2001, while the value of the greenback has declined by 35-40%.

Especially keeping in mind that the government is using taxpayer dollars to bail out private banking corporations instead of letting them fail, like what would happen in a true capitalist economy.

Answer 5

Inflation would go through the roof.

That's exactly what Germany did to pay for World War I.  

Check out their hyperinflation in the early 1920s.

To further elaborate for our upset chums below...

Before the early 70s, the US dollar was benchmarked on gold.

Afterwards, they thought to release the price fixing, and just let the value of the dollar free-float, i.e. backed by nothing.

The traditional definition of what the US dollar is backed by is "the full faith and credit of the US Government", interpret that as you will, but I think it simply means what the world thinks the value of the dollar will be tomorrow.

Whenever the government massively funds something...take for example the Iraqi War, you hear about billions upon billions of dollars being spent.

Well, the government doesn't turn on the mint and start printing dollars...that would really mess up the dollars' value and lead to inflation--which is why counterfeiting cash is a SERIOUS crime to the government.  

Rather, they borrow on tomorrow's money.  How?  They sell bonds.

So, in essence, that's kind of like printing money (you're still creating wealth from nothing), but it's not directly printing money today.  

Rather, the US Gov't will sell bonds, to whomever wants to buy them (China is a HUGE buyer btw), so they get money directly up front.

Trust me, that’s a whole lot comforting than say, printing money in mass quantities, when again the dollar is only backed by itself.

Answer 6

who else does it now?

Answer 7

wont happen until we stop policing the world and electing socialist, spend happy politicians.

Answer 8

It would create more inflation and more damage to the economy than borrowing.  

Answer 9

Um, Hello?  The Federal Reserve has been printing money since 1913...and we only print because every politician is fearful of throwing us into a taxing debacle.  The reason the economy is so low right now is through massive inflation (the devaluing of the U.S. dollar) which is caused by excessive printing of money.

Answer 10

The old "Goldbugs" pop up here and there, but our current economists drink the Kool aid for the status quo.  We need to put our financial house in order, but the powers that be aren't cool with that.  Almost like the situation in Zimbabwe where inflation is off the chain, but the folks in Mugabe's circle are taken care of.

Answer 11

Backing it with what?

Answer 12

The same reason you can't do it with your money!

Answer 13

The US has almost always printed its own money.  In the early days of the nation, currency was printed by banks.  It's been printed by the Bureau of Engraving for over a century now, going back to 1862.

What would the US government back it with though?  Gold reserves?  You're joking, right?  The entire US gold reserves are less than 5% of a single year's GDP.

You stop the borrowing by matching expenses with revenue, pure and simple.  In the past 50 years, only 2 presidents have ever done that -- Lyndon Johnson and Bill Clinton.

Answer 14

Printing money OBVIOUSLY worked so well for all the other countries who did it.

I'd love to have a few trillion dollars in the bank . . . Oh but that would maybe buy me a pack of cigarettes.

What a stupid question.

Answer 15

They would be in deep trouble.