if the u.s.a is in debt and we make our own money, cant we just make extra money and be the richest country?

Question

i always hear that the u.s is in debt. we make our own money so why cant we just make a lot more than usual and be out of debt?

Answer 1

Well then every country could do that as most countries make their own money.

Answer 2

All countries are in debt, and if you're not the richest country you're second or third. Seriously, you guys (and us, for that matter) live piggishly in comparison to most other countries.

America has a debt, which is payed to the world bank, which accumulated because of wars, setting up your country, buying imports etc. You also have a GNP or gross national product, or amount of money you're raking in each year. Part of that money must be spent on health and education and military and military and military.. ;) and everything else to keep you going, and a smaller portion is used to pay off the debt. The debt isnt something that has to be cleared and may never be. But it's not a bad thing, neccessarily, as long as its kept maintainable.

Answer 3

Ya we can make lot more than usual but let me clear you the situation then:

When we will make more money, the same has to be distributed as per the present way (as we cannot distribute it here and there) i.e. the person having money now, will invest the same and will earn big income out of that and that will make him more rich and there would not be any change in a poor man's life. Now the person who had got more money will be ready to pay high for his needs and thus the thing, which usually costs for Rs.5 for example will be sold at Rs.50/- (ten times). The same situation will be there if in case we use the money to clear our debt.

hope you will understand, why we don't make money

Answer 4

The printed dollar is simply representative of value which is based upon elements such as trade and the overall economy of the country. Our dollar used to have a gold base but that is primarily abolished.

This is called fiat money. If we simply print more and more money, that leads to hyperinflation. It could easily result in $25 gasoline and a steak at $100 per pound.

Here is the quote on hyperinflation from Wikipedia.org. Note the reference to the increase in the supply of money. Also see fiat currency on Wikipedia.org.

"In economics, hyperinflation is inflation which is "out of control", a condition in which prices increase rapidly as a currency loses its value. No precise definition of hyperinflation is universally accepted. One simple definition requires a monthly inflation rate of 50% or more. In informal usage the term is often applied to much lower rates. The definition used by most economists is "an inflationary cycle without any tendency toward equilibrium." A vicious circle is created in which more and more inflation is created with each iteration of the cycle. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply or drastic debasement of coinage, and is often associated with wars (or their aftermath), economic depressions, and political or social upheavals."

Answer 5

We have to keep the amount of dollars that are outstanding roughly equal to the value of everything we can produce. If there are too many dollars out there, each dollar is just worth less when exchanging with another country. So if we printed a whole lot of extra dollars, each dollar would buy much less than a dollar buys today.

The countries that we owe money to would demand gold or another valuable commodity instead of the worthless dollars.

Answer 6

The amount of mony a country can print in determined by its gold reserves.

If a country starts printing more money then that, the currency starts to devaluate. Meaning that it won't be worth as much anymore.

Happened in history already several times when people had sacks of money, but could only buy one lump of bread with it.

Answer 7

Gold has to back it up. We are still borrowing money from other countries, and paying interest on it; and still giving it away to other countries. Does that make any sense. Do you think the politicians handle their own money that way? I don't think so.

Answer 8

Wonder boy, that simply won't work. Our money is deflated enough as it is. If we (the Treasury) did that, you would soon have money that would only be good for wallpaper.

P.S. I think I should have used the word devaluated instead of deflated.

Answer 9

even though we print out own money it's backed by gold at Fort Knox so it's not like we just make it up. We actually have something to back our dollar.

Answer 10

I always wondered about that!!!!!!!!!