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I seriously can't believe anyone with at least a high school level macro econ education doesn't understand why its not a good idea for a government to simply print all the money it needs. Go ask Zimbabwae how that's working out for them.
zimbabwe has other problems. their agricultural and mining production has ground to a halt. government spending is 98% of zimbabwe's economy. that's a different issue.
Has this seriously not crossed anyone's mind yet, with all the bailouts and such? Why in the hell do we have federal taxes in the first place if we can just print money?
Why do you think that we can, and as much as we want to?
zimbabwe has other problems. their agricultural and mining production has ground to a halt. government spending is 98% of zimbabwe's economy. that's a different issue.
Zimbabwae has plenty of problems, printing money out of thin air being one of the biggest.
Hyperinflation becomes visible when there is an unchecked increase in the money supply (see hyperinflation in Zimbabwe)
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A vicious circle is created in which more and more inflation is created with each iteration of the ever increasing money printing cycle.
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If the entity responsible for increasing bank credit and/or printing currency promotes excessive money creation, with other factors contributing a reinforcing effect, hyperinflation usually continues
Firstly, the government doesn't create money itself, it borrows money which was created by the (privately owned) Federal Reserve Bank (from nothing). So, in that light, your proposal would be kind of like the government paying off its Mastercard with its Visa card.
The Federal Reserve likely wouldn't allow the government to borrow money at such a rate that the currency is destroyed (although one might question that, with the Federal Reserve's latest money-printing expedition). The only thing that keeps the US dollar viable is the fact that the bankers at the Federal Reserve Bank don't want to kill the golden goose. Paul Volcker tightened monetary policy in 1981 to prevent a hyper-inflationary meltdown. One might suspect (hope) that the current Federal Reserve board might do the same sometime soon.
The monetary system in the US is a house of cards (and in countries around the world). The only thing that makes a dollar worth anything is consumer confidence. If consumer confidence in dollars is lost, the country will have to revert to a barter system. Under other circumstances, a barter system might be preferable to a fiat currency, since the market would determine the value of the medium of exchange (people would probably choose some precious metal, since so much value can be stored with such a small amount).
Unfortunately, current laws and taxes make bartering in anything but dollars all but illegal. Under the current rules, bad money will drive good money out of the marketplace during a financial collapse. A rapidly declining dollar would render huge taxes on holders of commodity goods, masked as taxes on "capital gains" if those commodities are traded. Under the current rules economy would effectively freeze in the event of the collapse of dollars, since nobody could trade anything.
A rapidly declining dollar would render huge taxes on holders of commodity goods, masked as taxes on "capital gains" if those commodities are traded. Under the current rules economy would effectively freeze in the event of the collapse of dollars, since nobody could trade anything.
this doesn't make sense, because the whole point was to do away with federal taxes.
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Originally Posted by Febtober
Zimbabwae has plenty of problems, printing money out of thin air being one of the biggest.
Zimbabwe is not a good comparison.
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Originally Posted by Shankapotomus
Why do we have a monetary system?
as a medium of exchange.
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Originally Posted by EinsteinsGhost
Why do you think that we can, and as much as we want to?
because we're headed down that path, already. The average american has been O.K. with inflation, and thinks that lower taxes are a panacea for growth.
People are making valid points why you can't just print as much money as you want and you're just saying, "Oh, that could be avoided" or, "That's not a good comparison" without explaining how or why.
Zimbabwae could be used as a case study of hyperinflation rooted in out of control generation of currency. Did you even read the article on hyperinflation?
This doesn't make sense, because the whole point was to do away with federal taxes.
Without fiat currency laws, why would people trade in little unbacked pieces of paper which are handed out by the government? I'm all for abolishing legal tender laws, but I'd argue that would make dollars essentially worthless, and it wouldn't matter how many of them were created.
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