If the world is in so much debt?!?

Question

if we are in so much debt- why cant me just make more money?

i know this is a blonde ? but i couldnt think of another example.

Answer 1

you can't just print money then the money would have no value

Answer 2

There is nothing wrong with debt under certain circumstances.

If it is used to purchase a asset that accumulates in value, or a productive asset that will help increase revenues, debt is good. Think of a mortgage to purchase a home, or a truck for a business or workman. On a national scale, think of an interstate highway system, or expanding our shipping waterways.

Actually, debt is OK, as long as your income allows servicing the debt without any hardship. That's where we are with our national debt. Sure, we have a huge debt, but paying the annual interest only amounts to 10% of annual tax revenues. This is actually better than in 1996 when it was 14%.

This is the thing people who harp on our national debt don't really understand. We don't NEED to pay it off. We can continue rolling it over and refinancing the debt, and keep servicing it. If the economy grows 3% a year, and tax revenue grows 3% a year, we could grow our national debt by 3% a year and still pay the same percentage of our tax revenues to pay the interest.

Now imagine if we stopped adding to the debt for 10 years, while tax revenues continued to grow. In 10 years, maybe it would only take 3% of our nation's tax revenues to continue to pay the debt.

This is the factor always skipped by those covering the debt issue. They ignore that our nation's GDP and tax revenues will go up and make it easier for us to pay interest on that debt in the future.

Answer 3

Because if you print more money it devalues the other money that is out there. Then you have to get more money to buy the thing you wanted before. It is a quick route to inflation.
Both links below may help to answer the question better with the wiki answer being more detailed.
http://econc10.bu.edu/Ec341_money/Papers/Hubbard_paper.htm
http://en.wikipedia.org/wiki/Hyperinflation

Answer 4

The problem is when you make more money, it makes what money is out there worth less, commonly known as inflation. Germany tried this tactic after WWI and it destroyed what little economy they had left and started the term hyper-inflation.