Tuesday, February 23, 2010

A clear-cut solution to America's economy troubles?

Honestly it's so obvious, why can't they just print more money?





I know it won't increase the value of te dollar, and I remember hearing in school that the money in a country has to match the gold... Or something like that.








So where would it go wrong?


A clear-cut solution to America's economy troubles?
First thing, the US has not been tied to a gold standard in decades.





Second, printing more money will do nothing but cause mass inflation (see 1930's Germany).A clear-cut solution to America's economy troubles?
Print Money....Ever heard of Hyper inflation in Germany before WW 2


How about right now, Botswana in Africa, now has a ';Quadrillion Dollar Bill'; it was worth $23 USD but now is worth Much less


Inflation rate...over 1,000,000% per year





That's why you don't print money to get out of a problem.





The best way out of the financial mess, is to LEAVE IT ALONE...Let the chips fall where they may, Take the financial hit, and Deep recession that comes, but at least it will be over and the problems will have solved themselves.





But it is not a POLITICALLY acceptable solution.



Money is a representation of the aggregate wealth of a nation. If we print more money, we don't have more wealth. What we would have is more inflation.
Printing more money creates inflation, which increases interest rates and is bad for economic growth. They more or less tried your solution in the 1970's and it did not turn out well.
Ask the folks in Zimbabwe what could go wrong.

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