REVISED: How is America in debt when in fact they could go to the printing press and make more money?

Question by Michael: REVISED: How is America in debt when in fact they could go to the printing press and make more money?
Some have said the aforementioned makes money worthless others have said money would be nothing more than a fancy drawing on it stating inflation. But I still don’t get it – How would someone know that it is worthless? I mean if I was a business owner at 7 Eleven and you had an unlimited supply of printed cash how would I know it’s worthless? – You give me money; I pay for the overhead to keep my lights on.

Best answer:

Answer by capwest5a
Well, what you have read is correct. Merely printing more money doesn’t do anything about the underlying economic conditions. It merely devalues the currency. That roll of toilet paper that used to cost $ 1 will cost, say $ 5. Devaluing the currency by flooding the economy with more of it than is needed leads to inflation. Your dollar is worth less and less in purchasing power.

The ‘printing more money’ scenario has been tried in many countries, notably African and South American countries. It doesn’t make the economy in those countries BETTER, it makes them WORSE. It can REALLY spiral out of control. That $ 1 roll of TP could end up with a price tag of, say, $ 1,000 if a government floods the country with massive amounts of currency. It’s happened. That’s a concept called ‘hyper-inflation’. Recall post World War 2 Germany. One literally needed a WHEELBARROW full of worthless Deutchmarks to even buy a loaf of bread. Iran and Iraq are trying that NON-OPTION currently. They are ‘revaluing’ their currencies on nearly a yearly basis. Which amounts to the same thing as printing more money. Last time I checked, I think you needed like 8,000 Iraqi rials to equal ONE US dollar.

Large-scale currency manipulation as a long-term economic ‘solution’ just doesn’t work. It’s a historically proven FACT that it doesn’t work.

Give your answer to this question below!