Question

Why is it not feasible for the government to simply print more money for their benefit?

Answer 1

Because the more money in circulation, the less value it has on the world markets.. . Treasuries just can't do that...it would cause massive devaluation and economic upheaval!

Answer 2

One word: inflation. Price levels are determined by the money supply.

Answer 3

Well he is right the more money that is in circulation the less value it has. And if our money depresates to other countries our net worth as a nation decresses with it.

Answer 4

money isnt real. all it is is an idea. learn that and youre already ahead of about 90 percent of the population.

Answer 5

Nice idea, but in reality, it would cause chaos. You see, the price of everything we buy, is based upon a limited amount of money, chasing after a limited amount of goods, or things to buy. IF the government just FLOODED our economy with money, then the price of everything would go up! If we had twice the amount of money circulating to buy the same amount of goods, then everything that costs $1.00 now, would cost $2.00 then. Etc. Until eventually the "value" of our currency would be worthless. Not only would it wreak havoc on our economy, but it would disrupt the flow of goods, and services world wide.. . The value of our dollar, would actually decrease against other currencies. So, something that is imported from another country would go way up in price, because our country's currency would be worth less in comparison to that of other countries.. . I hoped that helped.. . Mark

Answer 6

i dont see why everything just cant be free...then money wouldnt be a problem for anyone

Answer 7

You got it all backwards.. . The more money a Government prints the worse it gets.. . Here is a $50 Billion Bill from Yugoslavia printed in 1993 . http://en.wikipedia.org/wiki/Image:BanknoteYug.jpg. . In fact, Yugoslavia no longer exists today!. . Hyperinflation is generally associated with paper money because the means to increasing the money supply with paper money is the simplest: add more zeroes to the plates and print, or even stamp old notes with new numbers. It also is the most dramatic. There have been numerous episodes of hyperinflation, followed by a return to "hard money". Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a "run" on the store of value.. . Unlike inflation, which is widely considered to be necessary to a healthy economy, hyperinflation is always regarded as destructive. It effectively wipes out the purchasing power of private and public savings, distorts the economy in favor of extreme consumption and hoarding of real assets, causes the monetary base whether specie or hard currency to flee the country, and makes the afflicted area anathema to investment. Hyperinflation is met with drastic remedies, whether by imposing a shock therapy of slashing government expenditures or by altering the currency basis. An example of the latter is placing the nation in question under a currency board as Bosnia-Herzegovina has now in 2005, which allows the central bank to print only as much money as it has in foreign reserves. Another example is dollarization as Ecuador officially initiated in September 2000 in response to a massive 75% loss of value of the Sucre currency in early January 2000. Dollarization is the use of a foreign currency (not necessarily the U.S. dollar) as a national unit of currency.. . The aftermath of hyperinflation is equally complex. As hyperinflation has always been a traumatic experience for the area which suffers it, the next policy regime almost always enacts policies to prevent its recurrence. Often this means making the central bank very aggressive about maintaining price stability as is the case with the German Bundesbank, or moving to some hard basis of currency such as a currency board. Many governments have enacted extremely stiff wage and price controls in the wake of hyperinflation, which is, in effect, a form of forced savings: goods become unavailable, and hence people hoard cash, as was the case in the People's Republic of China under "Great Leap Forward" and "Cultural Revolution".. . For a variety of reasons, governments have occasionally resorted to printing money to meet their expenses. During hyperinflation, the monetary authority can't even do that as it becomes a net loss. Those holding government debt, directly or indirectly, have less buying power. Theories of hyperinflation generally look for a relationship between seignorage and the inflation tax. In both Cagan's model and the neo-classical models, a crucial point is when the increase in money supply or the drop in basic money stock makes it impossible for a government to improve its financial position. That is, when fiat money is printed government obligations that are not denominated in money increase in cost by more than the value of the money created.. . From this, it might be wondered why any state would engage in actions that cause or continue hyperinflation. One reason is that often the alternative to hyperinflation is depression. In late 2001, the Argentine peso collapsed in value. Rather than printing sufficient cash for the public to carry, which they feared would start a run on the banks, the government took the peso off its dollar peg. Many international economists predicted that they would have to get a new loan from the IMF and impose shock therapy in order to avoid hyperinflation. Currency controls were imposed, tariffs were instituted, and the economy was allowed to fa