Does destroying currency help the economy?

Answer 1

i believe it increases the value of a dollar.

Answer 2

I'm not really sure what you are asking. Are you talking about destroying literally or as a figure of speech? Our government destroys money when it wants to replace it. Either the money is old, worn, or we've printed a new color or design on our money. The old is destroyed as it passes through the reserves. It will be replaced by new money and sent back to the banks.

Now, the federal reserve rates determine money supply. How cheaply can the banks borrow money to lend out to people and businesses. This is what controls the money supply. If you want to tighten the money supply, you raise the fed rates. Money becomes more expensive to "rent" from the government.

You can also talk about "destroying" or devaluing our currency with respect to another nation's currency, a result of which is typically higher exports and lower imports. If our money is worth less overseas, we don't buy as much overseas. Foreign made products become more expensive compared to domestic products, all else equal.

Hope this helps.

Answer 3

The only thing you need currency for these days is vending machines. If the currency were all gone they would make them operate with plastic too. I don't see it having much effect except for children too young to have plastic. The was an example once where a community ran out of currency for several months due to banking problems. They started using personal IOU's and checks for money.

Answer 4

i personally think it would have a complete negative effect because without currency there would be a terrible bartering system where it is harder to determine the value of one thing to another. where as with dollars it is easy to exchange as well as sets a standard for all things to be compared. so yes there is an absolute need for currency.

Answer 5

What do you think has been going on? Printing money for lower mortgage rate = trouble. It pushes the value of the dollar down.

Answer 6

Yes, yes it does. You know what else helps the economy? Sending your money to ~me~ so that I can spend it! It keeps the economy moving!

Answer 7

I heard money, US money, isn't backed by anything anymore, silver, gold or anything. The US mint prints up whatever it wants, when it wants. Considering this, I can't see how your getting anything back into the government's pocket. It used to be, when money was backed by gold, you burn a dollar, the govt. earns a dollar.

Answer 8

no it wont I think that once to currency is all gone and we all use plastic then there going to be alot of stolen idenitys happening all the time.

Answer 9

If it is destroyed it costs to replace it.

Answer 10

Why not? Congress thiinks it does!