if the government struggles to pay for key services then why not just print more money?!?

Question

we seem to have a problem in this country with under funded sections of key service areas i.e. armed forces & the n.h.s. Now im no economist but why dont we print more money and channel it into improving these services instead of squandering it on silly projects such as the dome and other failed enterprise areas. derrrrrrrr!

Answer 1

The problem that just printing more money (i.e. increasing the money supply) leads to inflation (i.e. an increase in prices) and a reduction of the value of the currency. Neither of these are good things in the long run.

Please note that, contrary to popular belief, the pound has not been tied to the gold reserves since the 70s.

Answer 2

It is babbling incoherent ignorance like this that elected Obama and every other leftist over the past 90 years and is one of the primary reasons the United States is going the way of the Tyrannosaurus Rex (news alert: they are extinct). To begin with Obama doesn't own the government, it is not his to give away. The taxpayers own Obama and every other government official. Second, the government does not make money, it takes money from the productive workers via taxes. Third, printing money results in: 1) inflation and 2) a decline in the value of every dollar in your pocket. Currently every $10 in your pocket only buys $7.60 worth of goods. So if the value of the dollar declines 5% and the inflation rate increases 5% you have lost 10 percent of your money. In other words if you make $50,000 per year, inflation and a decline in the value of the dollar is like receiving a pay decrease to $45,000 per year. Therefore, if you want a socialist based government where 50 percent or so of the workers are government workers, then try Greece -- it is lovely this time of year.

Answer 3

Printed money is worth nothing! It's just paper and ink. It works in the same way as a cheque. If you read what is written on the front of a note it says "I promise to pay the bearer on demand the sum of ....." and then the note denomination. Behind every bank note produced is an amount of gold. Technically you could go to the bank of England give them your note and ask for your gold. As others have correctly stated, printing more money would lead to inflation. This is because the more money you print, the less the value of the gold becomes. Think about a business worth £1million, if you issued one share, it's value would be £1million. If you decided to issue 1 million shares, they're value would be £1 each. Britain's gold reserves are bought and sold like any commodity, daily around the world. In order to manage the economy effectively, the bank of England have strict guidelines about how much money can be printed and issued.

A country is just like a business and the only way to increase the value of the country is to trade with other customers (countries)

Answer 4

No not print more print none and let all transactions be done with cards, it probably costs less to make, could be a global currency and being that its automated I think we could probably do away with banks as such cause even a basic pc can move numbers from one place to another and lets face it that's all it is the physical side like spending notes and coins is just to make it seem like it has value and that's the trap. How can we continue to put money up as the most important thing and watch the planet get destroyed in pursuit of of it? and our species arrogantly professes to being superior, dominant, top of the food chain, all that means is that no other species relies on our survival for its food and If we do wipe ourselves out the planet would benefit and species that we are about to make extinct would flourish. I'd say that any species that knows that its destroying the only place it can survive but places anything as more important than saving itself like trying to have more numbers in your account to move about, puts us as amongst the dumbest of creatures and in fact its the simple single celled organism that's more important because it sustains the next species which sustains the next etc

Answer 5

If you print more money, then the value of the currency goes down, its called hyper inflation. Germany tried it in the 1920's

Hyperinflation started when Germany had no goods to trade with. Printing money was the solution sought at that time, though there are other better solutions to it, for example, borrowing money from the US (President Gustav Stresseman did this and Germany earned a precarious economic boom). This allowed Germany to pay war loans and reparations with worthless marks and helped ex-great industrialists to pay loans as well. This also lead to pay rise of workers, as well as businessmen whom wanted a profit out of it. Circulation of money rocketed and soon, the Germans discovered their money was worthless. The value of the Papiermark had declined from 4.2 per US dollar at the outbreak of World War I to 1 million per dollar by August 1923. On 15 November 1923, a new currency, the Rentenmark, was introduced at the rate of 1 trillion (1,000,000,000,000) Papiermark for 1 Rentenmark. At that time, 1 U.S. dollar was equal to 4.2 Rentenmark.

It led to the collapse of Wall Street in America, the rise of Adolf Hitler, and World War 2.... I don't think it is such a good idea ... do you?

Answer 6

because if they print more money then there will be more in circulation which would push our levels of inflation up and at a rate that Gordon Brown wouldn't like seeing as he has kept it so level over the past 10 years. If the rate of inflation goes up then we all have to pay more for goods and so, unless the currency of another country goes down, we would probably be worse off than before.

Though i have to agree that if they didn't waste money on things like the dome then it would be alot easier.

Answer 7

one reason why that's not a viable option is because of inflation. the more money in circulation is the higher the rate of inflation. therefore, you will have more money chasing fewer goods and services and the result would be an increase in price to obtain equilibrium in the market for those services and goods. Its not the most efficient means to improve the economy simple by printing more money.

Answer 8

Inflation would go through the roof you would end up paying £1000 for a loaf of bread!
Although to be fair inflation is being kept artificially with low with Gordon browns flood of immigrants keeping wages low, if you take house prices into consideration your money is almost worthless to the average ftb

Answer 9

It would cause the currency to lose value, but it might still be an answer. After all, taxing people is damaging/punishing too. But inflationary moves like this may hurt the most poor, old, weak, vulnerable the hardest.

Answer 10

Because printing money causes hyperinflation; it reduces the amount a dollar is worth.

In the end, you don't change the overall wealth of a nation, and you destroy savings by inflating away people's wealth.