Food for thought 3?

Question

Okay, they say the nation is in a deficit (financial)...now, how come they (president, etc) just can't make more money? meaning, print more money out..I mean is there a limit to how much money you can print out? do you understand where im coming from?

Answer 1

The short of it is, it wouldn't work.

Never mind, for the moment, the complexity of our Federal Reserve system in the U.S., that the *banks* have more say in and control over the money supply than the government does....

The point is, if you just print more money, each individual dollar ends up being worth less for it. This is what happened with the inflation in the 1970s, there wasn't any economic growth, and the government printed more money to keep things going....

And prices went up to compensate. For example, I used to collect comic books as a kid. They were once a quarter apiece, and some of the ones published before I was born in 1966 were a nickel or a dime apiece....

But just in *MY* lifetime, I've seen the price go up, to fifty cents, then to a dollar, and now....you end up paying close to three bucks a pop for a *normal sized* 17-20 page comic book. The bigger ones can cost nearly five bucks apiece.

And while there *are* other things going on to drive up the prices of goods (economic growth itself can do this, as can a reduced supply of resources), the truth is, money just isn't worth, per unit, what it was once worth back in the 1970s or even the 1980s. And some of that is because there is *more money* printed, out there, floating around, not just in our own country but *worldwide* too.

Which is probably the other reason the *banks* that control our money supply don't *want us* printing more money.

We have a reputation, worldwide, of at least being economically solid and reliable. And while we of all the nations in the world are likely the only one (out of two or three) that is rich enough to actually *print* our way out of debt, the truth is, doing this would ruin our reputation worldwide for years to come, and seriously dampen economic activity all over, keeping *everyone else* from having jobs, growth, and from paying *their* bills.

So yeah, it's complicated, but basically, we don't want *more* inflation and *higher* prices than what we have short-term, and even if we did, long-term we don't want to freak out the whole world and ruin *their* economic lives just to get *our* debts paid.

And that, as they say, is the official, polite version. ^_^

Good Question....have a star!

Answer 2

Someone else asked this question and I told them the answer. Now I will tell you..

No they cant just print more money. Like with anything in business you have supply and demand.. that works in a couple of ways I see..

1. People have a Demand so someone creates the Supply
2. If the Demand is more than the Supply the price of the Supply increses..

So back to your money. If you made more money than Value of our Dollar would decrease significantly. So when you have controll on the Supply you can keep the value High for what its worth. There are way more people in the United states in need of money than we have money. If everyone could get there hands on 1 million Dollars.. than the price of everything would go up and nothing would be worth much even the money that we have.. So there is a cap on how much money the Federal Government can Make.

i.e. Did you know that your dollars after so many years are rounded up and shredded so that they can make new ones?

Answer 3

Dear Jay
Yes. There is a limit of printing money by any Government.
Just like the example: Suppose you needed more money for your expenses in a particular month. Your father gave you his ATM card to draw when ever you needed money. Let us suppose your father told you that you may draw the requirement, assuming your earlier report that your expenses will be say YYY $ on average. So your father will be ensuring to see the minimum balance in the account so that you may get from ATM the amount of YYY $.

Now you needed more amount. You wanted to help your friend by a similar amount, so thinking that the additional amount will be re deposited next month, you tried to draw from ATM. You will not get anything more than what is there in the bank that can be drawn.

It is like that. Any country, can have their currency, equal to the value of GOLD it has in its Reserve Bank, i.e. with the country's Bank. The international Exchange Rate also is arrived at the value of the country's Gold and money put to circulation.
Deficit in finance is due to making more expenditure than the revenue income. So there will be unsettled account somewhere, which becomes due to be paid later.

Answer 4

the dollar bill we have, money, only represents how much gold our country has. how come we don't print out more money is because like a credit card if you spend alot and really you have nothing you will be even poorer and will have many bays to pay. how our country gets more money is with trading goods from other country's. the more people want what we have and sell them the more we earn yearly. also when you buy foreign goods from other country's its bad for our economy and that's why they have taxes. so some of the money your spending will go to our country.

Answer 5

The nation is in deficit for 2 reasons:
1) The trillions of dollars worth of cash, goods, and services we lend to other countries, most of which will never be repaid.
2) American's have a tendency to abuse their credit cards, the resultant "amount due" often exceeding their income and ability to pay, so we are stuck sucking up those losses as well.

Answer 6

There is a limit. I don't know what that limit is but there is one. I understand where u are coming from and making more money will solve one problem but will cause another

Answer 7

yes but its not about paper money honey.