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Classical economic theory says that as long as the Federal budget is balanced there is no impact on the economy. What it takes out in taxes it puts back in in the form of Social Security checks, soldiers salaries, highways and fancy new weapons systems. But in the case of the US, there is a constant trade deficit, meaning billions go out of the economy, many never to return. In order to make up for the loss, more must be pumped in. For this reason, the government should run a deficit and print enough to cover the deficit. I know that stating this will lead to a lot of personal attacks, but what do you say?
Currency in circulation went up to $1,671.9 from $1,571.1 in 2017. That is an increase of $100.8 billion. Actually the last print order was $206.9 billion, but over half of the money goes to replace worn out banknotes.
Are you suggesting that we should be printing over $720 billion in banknotes so that after the worn notes are replaced we can cover the trade deficit?
The 2009A series of color $100 banknotes totaled $726.72 billion but that was printed from October 2011 until April 2017 (69 months).
I don't mean this as a personal attack, but doesn't that sound a little insane? The Bureau of Engraving and Printing couldn't produce that many bills without re-introducing the $1000 banknote again.
Currency in circulation went up to $1,671.9 from $1,571.1 in 2017. That is an increase of $100.8 billion. Actually the last print order was $206.9 billion, but over half of the money goes to replace worn out banknotes.
Are you suggesting that we should be printing over $720 billion in banknotes so that after the worn notes are replaced we can cover the trade deficit?
The 2009A series of color $100 banknotes totaled $726.72 billion but that was printed from October 2011 until April 2017 (69 months).
I don't mean this as a personal attack, but doesn't that sound a little insane? The Bureau of Engraving and Printing couldn't produce that many bills without re-introducing the $1000 banknote again.
Printed currency is but a small part of our total money. Most is electronic.
After the 2008 crash the Fed created about $4T of new money, but no circulating paper currency.
The crux is the powers to be love inflation because it helps to diminish the impact of their propensity to take on more debt. They hate the idea of deflation because it shoots a big hole in their debt con game. The United States is the largest debtor nation in the history of the world. Countries that become the largest debtor nation in the history of the world never end well.
The Federal budget can be balanced and there can still be a huge trade deficit. The budget can be balanced, there can be no trade deficit, and there can be hyperinflation. There is no connection between your premises.
China isn't sending us stuff for free. When a country has a trade deficit, it is importing capital.
The trade deficit was $621 billion. Perhaps a third of that returned to the US in investment. So the government should be running a deficit of maybe $400 billion, much of it printed, to keep the economy moving. In fact the deficit was $1 trillion, way more than what is needed.
The crux is the powers to be love inflation because it helps to diminish the impact of their propensity to take on more debt. They hate the idea of deflation because it shoots a big hole in their debt con game. The United States is the largest debtor nation in the history of the world. Countries that become the largest debtor nation in the history of the world never end well.
A gov't deficit = A private sector surplus. We the people suffer from too much money?
Well the title of the thread was "why the government prints money".
I you both thought printing physical money, then the question is then far from being answered. Many people equate 'printing' money with central money creation by any means.
I would say you don't have a hint about the money supply and are confusing that with currency. No simple explanations on the forum are going to be understandable without spending some time learning the basics.
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