Could the gov't raise the value of our dollar by simply printing less of it?

Answer 1

No; just cause there's less dollars around doesn't mean the people who exchange Goods and Services will just say since you only have so many dollars we will accept that as payment. That's just limiting the supply of dollars, not the value of dollars.

Answer 2

In theory yes, sort of. While it is not quite as simple as "printing" less money the government can make less money available by increasing interest rates through selling debt on the open market (this is a function the Federal Reserve has and they can also buy debt through the open market committee to decrease interest rates and essentially increase money supply). By doing this they increase the interest rate and decrease the availability of loanable $. Both of these occurrences result in increased valuation, interest rates through increasing demand for $ from foreigners since they can get a higher rate of return, and importers of US goods will pay more since there are less $ available for sale. Another method the government could "print less" is by decreasing the government deficit and expenditures, but this would likely cause recession and result in a devaluation of the $ since the economy would be weaker.

On the flip side, if there is no or weak demand for US $, there is little chance this will improve value....but at least in today's world the $ is considered a highly desirable currency to hold foreign reserves, and thus remains strong.

Answer 3

I don't think that will ever happen because the fact that it is printed on paper decides it's fate....Meaning the life expectancy of a dollar, five, ten,etc. are short lived....,I think I read the average life of a dollar bill is something like 3.1 years.........So therefore they will always need to continue to make the bills in order to keep enough in circulation at all times.........