Very odd - The country is in a crisis, yet the Govt. can EASILY print more money

United States
November 24, 2008 4:46pm CST
Am I the only one who finds it interesting how everyone including our government is saying how we are in an economic crisis in this country when, however, our government has the machines capable of printing more money to put into our economic pool? They're all acting like money comes from the sky - a wait and see process, nonsense. I can understand why, before this crisis, they wouldn't go buck wild with their money making machines because of the inflation consequences, but right now in our state of turmoil, I'd say it makes a hell of a lot sense for them to get on it and start printing bills like there's no tomorrow. Think about it - It's like to say as if you were in charge of a hat factory and the country is running out of hats, yet you work in a hat factory and can easily make more hats because hats are, after all, MAN-MADE. Money was our idea too, we made it, we printed it, we gave it value. So why don't they just make more bills from their printing machines since this is an economic emergency?
5 people like this
20 responses
@cupkitties (7372)
• United States
24 Nov 08
Becuase that would make things too easy and our government wouldn't have control over us. Thats what money is. A control device. Why do you think we need it to live?
2 people like this
• United States
24 Nov 08
Make things too easy? What is this, a video game? If they wanna do that after all this is over, fine, but right now It's people's lives/jobs at stake here, it's an 'emergency', don't they realize that? Or do they simply enjoy having a serious challenge on their heads? Hollywood has a better excuse for lack of good, original movies than our government does for running out of money.
1 person likes this
• Australia
25 Nov 08
I happen to agree, but the conventional economic wisdom is that printing money lowers the value of the US$, and for some reason that is seen as a bad thing. National pride is about the only semi-valid reason I can find for that. Lowering the value of the dollar makes imports more expensive, but exports more valuable, which has to have a good effect on the balance of trade and the national deficit. In addition, if items cannot be imported because they have become too expensivem, that opens the door for a d0mestic producer to cash in, which creates jobs and tax income for the government. But what do I know. I'm only an economic anthropologist. Lash
1 person likes this
• Australia
26 Nov 08
Perhaps I should add, inflation becomes an issue, but only because we have become so dependent on overseas trade. If an economy were to take the radical step of delinking from the global market, inflation would likely not occur, but asking the prime mover in globalisation to delink is a bit optimistic lol. Lash
1 person likes this
@livewyre (2455)
28 Nov 08
correction - exports do not become more valuable since the value of your currency is less. However having a low value currency DOES make imports more expensive. To expand on your theme: In a devalued market, your imported coal rises from $6 to $10 - your domestic producers can churn it out at $8, so good for them, they may pick up some business, but the extra cost is passed on to the consumer, so they still fund the rise from $6 to $8. The market finely balances itself and adapts to supply and demand. Artificially interfering by printing money or tinkering with tax and interest rates, messes up the balance and creates anomalies which become the boom and bust. It is tinkering that got us here in the first place, hands up if you think tinkering is going to get us out of it...!
@subha12 (18453)
• India
25 Nov 08
I think there are some more problems in printing more and more money. Then the inflation will be like sky bound. it will reduce the worthiness of the country, finance system. nothing will be in control. it will be much dangerous.
1 person likes this
@glorst (19)
• United States
25 Nov 08
printing more bills would just lower the value of the US dollar in other countries, thats the LAST thing we need. Especially when we rely on spending so much money in other countries to import many different goods. So the solution is to NOT print more money.
1 person likes this
@hopejordan (3566)
• Australia
25 Nov 08
hi there handsomeitaliano i am from Australia and on tv one time i saw a machine how they make the money i hae never seen so much cash like my dad says money is nothing but i know we need to survive with that money. take care have great day.
1 person likes this
@jonesy123 (3950)
• United States
24 Nov 08
If you put more money in circulation in the amount it would be needed, you would skyrocket inflation. Money is nothing more than a good you barter with. The scarcer the good the more you'll get for it. If there is more of the same good in circulation, people won't be as attracted to it and you'll have a harder time making barter exchanges for other items in exchange for it. Simple demand and supply. The more there is, the less it's worth. The trader knows he can get more elsewhere for his good and won't give you his good unless you provide more of your more common good. In money terms that would be for example, instead of paying $2 for a loaf of bread, you'll have to pay $6. Yet your income won't go up. How would that solve our problem? The crisis would in fact get worse as now we could buy even less for our hard earned money. That's why the federal reserve carefully balances how much money is in circulation. They don't want inflation to go up like a rocket.
1 person likes this
@newtondak (3950)
• United States
24 Nov 08
Here's a good article that explains why it's not a good idea to just print more money: http://economics.about.com/cs/money/a/print_money.htm
• United States
24 Nov 08
Producing more money would do no good. It would create more inflation. The country doesn't need more money in the economy. Our economy is weakening for a myriad of reasons none of which would be fixed by massively printing paper money. Learn more about your economic system prior to thinking to throw our country into a paralytic shock by increasing inflation. Zimbabwe or one of those African nations have forced inflation to such extremes they rolled out a 500,000 dollar bill which is worthless to them.
1 person likes this
@KrauseHome (35526)
• United States
24 Nov 08
I think it is because then we would have even higher Debt and Taxes, and misuse of funds even more than there is. But what is a shame, is there has been no division of who gets the $$ in the first place, so many continue to loose jobs, homes, etc. and no one really seems to be able to help. And if they are going to help them, they forget about those who have to help bail them out as their Interest rates on their homes, etc. go up and up and up while their value of their homes decreases as well. Personally, I think they will never think about the Small guy until change is really made as well.
1 person likes this
@capirani (1841)
• United States
25 Nov 08
All the paper money we have has to be backed up by the amount of gold in our supply. They do not just make the money to meet the need. If the gold is not there, neither is the paper money. That is what the gold in Ft. Knox is about.
@capirani (1841)
• United States
25 Nov 08
LOL Actually this reminds me of when I was a child and wanted my mother to buy me something. She said she didn't have the money to do it so I told her that she could just write a check. Little did I understand at that time, even though she tried to explain it to me, that she needed to have the actual money in the bank to back up the check. Well, now I understand. That is how our paper money and coins work. There is only allowed so much to be in circulation so that it doesn't go beyond what is able to be backed up.
• United States
25 Nov 08
I think they can print money beyond the gold reserve. debt is what they're all about
• Australia
26 Nov 08
Part of the economic problems the world faces is due to the fact that we went off the gold standard some time ago, and now there is nothing of value backing any world currency. And with the rising proportion of service industry over producing industry, we don't even have the value of labour to back up our currencies. Lash
• United States
25 Nov 08
A basic knowledge of world history is enough to know that this would not be a good solution. After the First World War, Germany was made to pay a massive sum in reparations to the Allies that they couldn't afford. The solution? Quickly flooding the market with money that soon became completely worthless. In no time people were using German marks to wallpaper their houses and burning them for fuel because they had less value than the paper they were printed on.
25 Nov 08
I was going to post that - took the words right out of my mouth! Just before WW2, there were stories of people having to use wheelbarrows to take enough cash for their shopping and stuff. The devaluation of the Mark was one of the reasons for all the civil strife that made it possible for the nationalists to gain power, if I remember right (I'm no history buff, so I might well be wrong). Not a good thing.
@livewyre (2455)
26 Nov 08
Printing money, like creating more shares in a company, just devalues the money itself. In the short-term you might generate some spending, but since the 'value' of the money goes down the prices automatically go up. Your local currency would very quickly become devalued on the global market and you would struggle to import anything, as it would quickly become very expensive. We don't 'give' money it's value, the world money markets assign value to a currency, not the printers. Why the hat analogy doesn't work: The value of the hat is based on the materials used and the craftsmanship involved in creating the hat - it's price would be labour costs+ material costs + profit. The value of cash is linked to the reserves of a country much like the value of shares are linked to a companies perceived assets. Print more shares for the same assets or more money to represent the same reserves and you just devalue the 'paper'. Plus you create panic, rapid inflation thus more panic and the only way out would then be to print more money creating more panic....
• Indonesia
25 Nov 08
if the Govt easily to print more money coz people need much cash money, and the bank very easily too to give somebody personal loan... then he value of their property was decreas, which realize money just paper...just receipt such common receipt like we are buy something in the store... till the crisis become worse coz finally they are realize money just paper.. have no value at all... the real value is tangible things like land, gold, or rice.. so stop to produce more money.. dont more easy to print more...its true, very odd..
@bayernfan (1430)
• Canada
25 Nov 08
ebatlleon and undertheoath are absolutely correct. I will add to their comments that currently the U.S. Dollar is the world standard. Many other commodities are traded in USD at the moment. The more you devalue the U.S. Dollar currency, the more you create the desire within other trading nations to change the world standard to another currency, for example the Euro Dollar. Some athletes and supermodels already demand payment in EUD after the U.S. federal reserve started dropping interest rates rapidly last year and devaluing the USD.
@iriscot (1290)
• United States
25 Nov 08
I seem to remember that at one time our currency was back by the gold that we had stored at Fort Knox. Maybe that is no longer the case. I don't think we need to necessarily print more money to turn things around. Money needs to be in the right person's hands. I have friends who simply put most all of the money they receive in the bank. There it sits not doing anything but earn more money for them. I have other friends who have to spend every dime they get to pay for food, mortgage, clothing, transportation, insurance and schooling. They are the real "money changers" they put all of their money back into circulation. When the rich store their money in investments and banks it doesn't turn from their hands to the merchant, who buys from a wholesaler, who buys from a manufacturer, who pays the worker to build or make the product, who pays the mortgage, and buys food, and buys clothing and etc..... You see... the money has to continue to turn over and when it stops, you have a recession or depression. The money is still there, it's just not being used right. What the people need now is HOPE and VISION that things will be better and they can help make it better. The worker who works for Chrysler, Ford or GM should be loyal to the company he works for and purchase the product that he builds. If it isn't as good as the other guys, it's his fault. Too many times you pass in front of a auto plant and see all kinds of brands of cars, a lot of them are foreign. Does that help him keep his job, I think not. Do you think he realizes what he has caused to happen, probably not. He just bought the other brand because it was a few dollars cheaper or he liked this or that feature that the brand he builds doesn't have. I have a friend who bought a Toyota about 3 months ago. I asked her if she didn't like the Buick that she had before. She said she loved the Buick and never had a problem with it. But somebody told her the Toyota was the best car made, so she bought one. Am I nuts or can somebody else see what is wrong here? Well the fact is, when money stops flowing from one hand to the next, things start to dry up.
• United States
25 Nov 08
ummm. you definitely have no idea on how economy runs. If they start printing bills like a mad man, imminent inflation is sure. Which means, all the values of money will become nothing but a mere papers. That also means, price of the product goes up and with what you could purchase before, now has to be more and more in number. if you were able to buy that product for $20, because of this madman bill printing, you might not get it at $20 but could be over $1000. Because, the value that money holds become less and less and commodity prices look skyrocketing if you suggest printing more bills like a mad man. You can't compare Hat factory with an economy. That's the ignorant analogy I've read so far and stupid too. There are certain ways to overcome this crisis. I agree that printing bills is a must but only after following certain definite processes. US Government is planning to give out billions of dollars to big corporates which is about to go out of business. How come they manage to give those aids when they are overladen with debts and loans? They simply ask federal reserve for that money(they purpose certain amount say $20 billion), in return they write some promissory note valued to their asked loan(say $20 billion) which they give to reserve and federal starts printing bills. I've heard that they can print the bills nine times in this whole long process of loan giving and taking. Which means, for ex: even if it's proposed that only the $20 billion dollars to be printed, they could actually go printing more than that. That's happening since way back. And when you see NEW,STICKY notes in your hand without you going to bank and asking for it, you assume it's Inflation knocking at your door. More they print the bills, more value it's gonna draw from yours and ours money which later on could make the bills valueless. To cover this up, we've to work hard to compensate our expenses, our debts. So, if government is running on debts, debts is money. They can't go increasing debts(printing more and more bills) unless it's needed and is assumed last resort. It's not that easy printing bills and giving it value out of thin air? we all as a citizens are gonna be under that debt when they do that. Certainly, they are printing more and more bills these days but they can't do it like a madman.. no way. They should workout pretty soon to maintain this economic equilibrium. Lets see how their bailouts are going to work which I think is what the great economists might have suggested government for such actions.
@bestboy19 (5482)
• United States
25 Nov 08
We may give it value, but if other countries don't give it value, it has no value. And it won't be worth the paper it's printed on.
• United States
25 Nov 08
What would back up this EASILY printed money?
@mariposaman (2967)
• Canada
25 Nov 08
You cannot keep just printing money as it devalues it. Using your hat analogy, if you do not make enough hats, people will chrerish the ones they have. If you start manufacturing hats so everyone has thousand of hats, the hats lose value. Money used to be a substitute for gold, a valuable metal. however it is now bsed on economics fo a country. Your idea creates inflation.
@xParanoiax (6999)
• United States
25 Nov 08
OMG, I really HATE how easily forgotten this little part of the crisis is. WTF do you think happened to our currency? Do you think it just devalued itself? What about the humungus national debt? You think that's all the citizens' doing? Our government prints and borrows money from other countries CONSTANTLY. This is what helped cause the inflation that contributed to the other factors that created insanely high prices for things needed in the average life earlier this year toward the spring! WHERE did you think all this money they just gave to these banks and things, came from? It's been printed and borrowed. You know why alot of them are worried they won't be able to continue to do this? Because if they do this much more, our dollar value hits zero and then our entire economy no longer has anything to stand on. Our economic standing, what's left of it, goes out the window because then we could no longer pay our debts -- which would've taken years to pay off anyway! This is a multifaceted problem. This in itself is one of this biggest ticking time bombs we have in our economy, as I understand it.