If America prints money, why exatly are we in debt?

Answer 1

We can only print as high as hundred dollar bills.

We owe trillions of dollars - that many zeros won't fit on the bill.

Answer 2

We are in debt because the Federal Reserve system is a private banking consortium. It is not a government office and it does not have to produce any audit information to the US government at all (it hasn't once done so in its 93 years of exictence).

The Federal Reserve, like any other bank, loans money at interest - meaning, for example, that if you borrow, say, $10, you have to pay back $12 to the bank to satisfy the loan and the interest. If anyone needed any evidence that the Federal Reserve system is not the US government, or a branch thereof, then ask yourself why the US government would charge itself interest on its own money? The fact is, it wouldn't.

Andrew Jackson fought to destroy the first central bank on US soil, called the Bank of the United States. The bankers even tried to assassinate Jackson to keep him from refusing (vetoing) the Bank's charter renewal. Jackson won and the Bank's charter lapsed and America operated without a central bank from 1836 until 1913. And you might be surprised to know that JFK was the first president in 50 years since the creation of the Fed to print real consitutional money - United States Notes - the 2 dollar bill. Many think that this is the real reason Kennedy was assassinated - because he challenged the money power of the Fed just as the bankers had tried to kill Andrew Jackson for the same reason a century or so before. This possibility is given more strength when it is discovered that one of the first things LBJ did after taking over as president was to rescind Kennedy's Executive Order creating the notes. Very curious indeed.


The Federal Reserve system was set in place (theoretically) to stop the boom and bust cycles that were manufactured by the bankers in order to create the Fed in the first place. But it was only 16 years after the establisment of the Federal Reserve system that the Great Crash of 1929 occurred, creating the Great Depression. This is a prime example of mismanagement by the Federal Reserve and shows that the institution did not do the job it was created for. We have had many cycles of recession since then, and the Fed has hardly been able to stop a one of them, nor curb inflation.

The Federal Reserve Act itself was passed by only 3 senators on December 23, 1913 after the Senate had adjourned and the rest of the Senators were on their way home for the holidays. The 3 Senators who pulled this little scam, also had a special interest in the bank and in drawing up the legislation that created it. It was a rigged game from the outset.

So long as the Federal Reserve private banking consortium exists, there will always be a national debt because that is the design of the Fed.

Answer 3

America, its people or its government does not control the money supply. Our Treasury department owns the presses, but they need permission to print money from a private bank called the "Federal Reserve". The Fed is not a government entity, it is a private bank jointly owned by investors representing the 7 richest banking families in the US and Europe. The Fed is also not a "reserve" of anything.

We are in debt exactly because we do not control our supply of money or back it up by anything of tangible value since we defaulted (declared bankruptcy) to the French in 1971 by refusing to trade the long-time fixed price of $35/oz of gold. That same year, we made a treaty with the newly formed OPEC so that they would sell oil only in dollars. This gave the dollar strength but not real backing, however it made the dollar the de facto world currency in that any nation wishing to purchase oil must do so in US dollars.

The other side of the problem is that our government spends far more than it take in in revenue. This is called a deficit. Both parties are responsible for this, as wasteful military and police spending on useless wars and foreign intervention on one side and wasteful and crippling social programs on the other are nearly equal in spending.

This deficit is payed when the Federal Reserve prints up little IOU contracts called "Treasury Bonds" and then covers the debt by ordering the treasury department to print more cash if necessary (making up money out of thin air in computer systems is far easier). This cash and wire-credit is used to pay the bills our government racks up. This money isn't free though, the Fed Reserve keeps these IOU's and charges the government interest on it. Further, the Fed Reserve sells these IOU's to other countries' central banks (like China, India, and Saudi Arabia) so they can collect interest. These countries purchase these treasury bills using cash they gain in trade deficits (when they sell us things like cheap shoes and oil), and hold them so long as the interest is paid. They also occaisionally cash these in for dollars, but dollars depreciate in value extremely fast and holding assets purely in dollars is suicidal for a foreign bank unless they are going to use them (ie, to buy oil).

This system is mathematically unsustainable and extremely vulnerable to foreign intervention. We are essentially debt slaves to China, India, and the Saudis or will be soon. That is the reason we go to war as well, like in Iraq when Saddam was prospering under the UN "Oil for Food" program. This was an example of two very bad things for the dollar, the trade of goods directly (ship full of food pulls up, unloads, oil barrels get loaded on, ship pulls away) means no money gets exchanged...no currency exchange fees for the bank and no need for dollars. The other side was that Saddam and family were taking massive bribes in Euros and gold bullion to facilitate these deals...BIG problem.

Now Iran wants (or has already) to open an oil exchange (bourse) in Euro. If we don't fry them quick there goes our happy illusion of an economy. Having the most powerful military in the world means always having a credit card with no limit. Unfortunately, the bill does come due.

Answer 4

Way back in the day, our currency (coins and bills) was actually backed by gold (and at one point silver), so it used to represent something of an actual tangible value. The physical value of the metal or paper used to make them is not important - for example, a penny costs more than 1 cent to produce yet a hundred dollar bill costs far less than a hundred bucks to make. Today, it is no longer backed by something tangible like gold or silver, but its value is essentially based on its acceptance and, for lack of a better term, trust. As a simplified answer to your question, if we just kept printing up lots and lots of money, it would go down in value as a principle of supply and demand...the more there is of something, the less valuable it is. And since the paper and metal itself has very little value, that could mean big trouble.

Answer 5

Just because they print money doesn't mean that they can just use it. And that's not the kind of debt they are in. Paper money is just currency. I think it has something to do with the gold reserves maybe.

They also print money to keep the currency new, like old crumbled dollar bills, they print money, and they replace the old ones.

Answer 6

You can't just print money. Every country prints money. There are rules and regulations and international standards to printing money. I am not sure whether it exists anymore as I have not kept up on it but there is the Gold standard. Each country keeps reserves of gold and it used to be the defining standard as to how much can be printed. How much money to be printed is determined by the Treasury. Too much can make it worthless and too little can make it hard for transactions.

Answer 7

Money is only paper, backed up by the federal reserve, printing more money just lowers its value, aka, inflation, like what happened to Germany after WWI, their money was useless, because the government just prineted more to get out of debt.

Answer 8

we can't just keep printing money to pay off our debt because then the value of our dollar will be less. to get out of debt our economy has to get better and we need to collect the money other countries owe us but tha would never happen and we need to stop spending money that we don't actually have. wars cost a lot of money.

Answer 9

Hey all countries have their own currency and they print it themselves.

So tats not how u see if a country is in debt ot not.

Also if u see the American economy is designed in such a way that they mostly create a coducive atmosphere for investment.

So its mostly some other countries money tats jus handled in US.

Probably Japan have more investments in US than what US have in Japan.

Answer 10

Printing more paper money means you need something of value, like gold, to back it up. This might just be totally wrong but I'm guessing overprinting leads to inflation, which should lead to the US having to borrow more, which leads to debt.