Why Not Just Print Money To Pay Down The Debt?
Introduction
The national debt has seemingly being increased each day. The federal government has sorted out measures to try and eliminate this debt, but nothing seems to be working. The people have, therefore, come up with suggestions that the government should print more money to pay the debt. This might not be a solution as well due to several reasons.
The federal government does not print out money, as this is the work of the central bank. The government tries to influence how the supply of money is in the economy to control and regulate inflation. This, therefore, means that printing of more money would make inflation even worse than it is right now. Why then would printing money lead to more inflation? This is because, the more the cash is printed and released to the people, the more the chasing and the lesser the goods available. This means that the consumer demands for goods will be high, whereas the firms and sellers will still have the same amount of products in their stores. This will, therefore, make the sellers increase the prices of goods due to the high demands. This is how inflation will come about. This will, in turn, reduce the value bonds, thereby losing the value of the national currency. If this happens, the investors will be unable to hold their trust in the government. The printing of money to pay the debt will only bring more problems than there is already (Furman, Jason, Lawrence, 82).
Conclusion
The government should compare both sides of printing money to clear the debt. Too much money in the economy will cause inflation, while too little money will continue the fall in prices, which will not be favorable to the economy.