Why Can't Government Print Money To Pay Off Debt?
HTML-код
- Опубликовано: 7 мар 2021
- Why can’t governments just print more money to pay off the country’s debt OR pay for everyone’s education OR end the poverty, OR abolish taxes, OR distribute it to make everyone rich? That would be a real example of money growing on trees! right?
By the end of this video, you will think that this question is absurd, which it is, but the question has been asked so many times by so many people, and there is nothing wrong to ask!
But before you can wish for more money printed, you have to know 'what is money', 'types of money', 'what printing money actually means' and 'why happens when governments print money'. The video will investigate how inflation and hyperinflation occurs and also the right kind of inflation.
The video also discusses examples of countries like Zimbabwe printing money that resulted in devaluation of their currency and Hungary that tried to pay off debt by printing money.
Share your thoughts by writing in the comment section below. We would love to hear your opinion.
#economy #inflation #recession
Support us on Patreon: / economicraven
Connect with us:
EconomicRaven.com
economicraven
economic_raven
economicraven
anchor.fm/economicraven
Imagine every one have a billion dollar, everybody buys their own private jet but the jet is not enough to meet the demands so they ask for bigger price. After buying the jet nobody can hire a pilot because all pilots are billionaires so you have to pay them more to hire them. In short the value of goods and services stays the same.
I can smell hyperinflation coming😄
@@sarmientoenricomiguelv.562 Its already here.
Perfect example of value of printing money
it is not real money. It is called fake money. Many countries already did print money like crazy to pay off debt currently and in the past. If they can fix their economy and countries in certain amount of time. Other countries will probably accept their currency at some level as their currency value will rise and other countries monetary investment will get certain benefit from it, else It is just getting worst. Later on, other countries no longer trade with them anymore and stop accept their money as it becomes worthless over time. nobody wants to hold money that continously losing value over time as it is a bad investment.
Oh, now I get it.
High Qualityuality content, educational, informative, accurate and straight to the point. I truly love your channel, keep on keeping on 😉.
I've got a question/request, totally non-related of course, however I'll ask anyway.
May I have a heart please??
Nice videos I was looking for this kind of videos thanks
thank you :)
Was looking for a more in-depth analysis to "what are the limits of government spending". Perhaps a depiction of selected economies and a comparison of their monetary policies...
Printing more money does not necessarily mean there is more cash flow. If the Federal government printed 10000 trillion USD and put it in a bank account, then that money has no chance of causing inflation. You also ignore unemployment, people can be employed to produce more goods thus keeping price level the same.
Zimbabwe - land reforms to redistribute resulted in catastrophic supply side losses which resulted in inflation and caused the printing of money. The printing of money was not the catalyst.
This video made it so clear, thank you so much:0
thank you for watching 🙏
Extreamly informative.. thanks brother.
Keep doing the good work you deserve more views and subscribers ❤️❤️❤️
very informative and educational, I'm looking forward to more videos like this
Thank you for watching 🙏
Your video is sincerely very good ! I am french and thanks to you I learn to listen english and I improve my economic level !
Thank you for watching 🙏
Your video is sincerely very good ! I am Spanish and thanks to you I learn to listen English and I improve my economic level !
Something missing from the explanation of hyperinflation is the decrease in productive capacity. You won’t get hyperinflation without the combination of increased purchasing power with decreased productive capacity.
Money loses it’s value when people lose faith that the country will be able to repay their loans. That means you either need some significant decrease in your ability to pay, or you need to print an exorbitant amount of money. In pretty much every instance we have seen of hyperinflation, there is some significant decline in the productive capacity of the nation that accompanies the increased spending.
Thanks for doing these videos they are so informative. Thank you.
Thank you for watching 🙏
Very useful content. I learn a lot. Like a lot a lot. I am a political science graduate with a keen interest in economic matters . Now my understanding is appropriate. I will thrust for sure my torso and engage debate with fellow so called intellectuals around. Keep on ,always keep on the content you are developing! We cannot thank you enough!
Thank you for watching 🙏
Is this not taught in your schools?
Well thanks for the Peter Pan spoiler
Great video
Great efforts employed 👍
Brilliant video.❤
Thanks alot...amazing information
Wish my teachers took classes like this back in school/college
Dear Raven, do you have any inputs as to post Covid Era, why stock and capital markets of countries like India are reaching an all time high values, where as the actual economy is dooming.
Because our interest rates are 4% and US's is almost 0%. So money is flowing into countries with two things:
1. Higher interest rates.
2. Stable currency and good/mediocre rating.
Excellent video! One clarification dou: it's *currency and not *money (gold and silver are money, us dollar, euro, etc.. are currencies) =)
👌gold and silver are money ..
Us Dollars and others are currency
The money and the resources of the world is owed
where you from bro? We need a video for the US economy! since the genesis !!
The US government prints money, but it has to borrow it from the private Federal Reserve bank to do so. The US does not print money without borrowing it first. This is why paper money says "Federal Reserve Note" on the bill. The Federal Reserve owns the bill, and the US government is borrowing it. It's a promise for the US government to pay back this money it borrowed from the Federal Reserve private bank.
How will US government pay?
@@shahwalrezalfitri7643 The government just goes into debt, the debt gets bigger, and the government has to pay interest on the money it owes the banking system which is at around 30 trillion right now.
It is very simplistic point of view. In general more money will appear in inflation. But in some specific situations even after big money stimulus we will not observe significantly higher inflation. It is all connected with the specific segments of the market (ex. Financial market/enormous companies) etc.
So to sum up, countries can print a lot of money, without causing the inflation. But it is only possible in some very specific scenarios.
The last qoute was kinda good
All these convincing arguments concerning economic conditions can be quite confusing especially
Query,
1. if the govt prints money to pay external debt how does that affect money supply in domestic markets? I mean you just pay it for external debt and not distribute to people in domestic markets.
2. The problem with printing money is that it will lead to high demand. If the govt prints more money to boost supply at the same time, won't it solve the problem?
Yes still wondering
Same doubt in my mind also ..if any solution please tell
1) what are they doing with that money? Where is it being stored? A lot of countries recieve US dollars as the US runs a trade deficit. They choose to store them in Treasury securities as they get interest 9n the money.
2) you are assuming "printing money" leads to higher demand. If there was exactly 350M people in the US and the govt gave them all $1, would there be inflation? What about $5, $10, $20...etc. when does it cause inflation? It has more to do with productive capacity.
What is appropriate ratio of M2 against GDP??
qustion ik about the hungarian hyper inflation but, i still dont know is it really a good idea and did achive what its purpes , if not how can a goverment be so dumb to print this much money ?
What if the government print notes and gives them to labourers in return for work like road construction?
That's exactly what government spending us supposeti achieve.
interesting topic and a good video.
in the minute 4:53 . what if the situation is changed.
the money is given to productive sector. not given to the consumptive sector or directly to the community.
so the printed money to produce more chair.
it is like a marshal plan or economic at war. the printed money is to produce something not to buy something.
because where is that money come form? if it is not printed.
or we still print money but backed by gold or the other precious metal or rare earth.
or we can make 2 curency just like china did. china have yuan for international usage and renbimbi for domestic usage
is there a way AT ALL to print money without it leading to inflation, as some economists suggest?
You’d have to have a policy that counters the equivalent to printing money. Having a higher interest rate to loan out money would work, as people wouldn’t invest as much, I believe.
Where could I find the texts of your videos to read?
Turn on closed captions
Can we print money only for external debt and avoid internal circulation/inflation?
Murphy’s Law says we are FUDGED.
It's just that they seem to think that they can keep printing money when money doesn't even exist I don't know what the people think
Printing money but using it to employ more of the jobs that help society i.e. Medical, Child and Senior Carers which means the people do these jobs because the earn much more than other jobs could ensure that as a society we would be better off.
Very short answer: because all money printed is interest bearing debt money. It s kind of an Uroboros
This is an oversimplification. Depending on how the new money is deployed it can increase or stabilize inflation. Using your chair example if the government loaned the new 10 million dollars it printed to say 2 chair start ups that then produces an additional million chairs annually the price of chairs would stay at 10 dollars. In fact the additional market competition could drive innovation to potentially even lower the cost of chairs. When new government money is invested in areas we know make the economy more efficient like infrastructure, education, and research it can increase production capacity stabilizing or even lowering prices.
4:20🤣🤣🤣
Hahaha hyperinflation has only happened where there been some serious issue in supply issues. Example war or in Zimbabwe where the kicked out all the white farmers and gave their farms to people who had no idea how to farm. Massive supply shock on food carried on printing money.
We have clear infaltion in real estate and the stockmarket etc. A lot off cheap credit makes theses blow up in value.
@@PMMagro these are bubbles purposely made inflation.
What happens if they produce and sell 1 million chairs more. So now they have 2 million chairs at USD 10?
Ask the germans they had a hyperinflation crisis or the hungarians who had the highest Inflation rate ever
Logic if a person is living in the modern world without money then they can't survive and will stave etc etc whether you like it or not unless government steps in to keep you until you die... ..... Tony cuenca
Money is the resistance to the system.
Late comer with a “silly” question: in the example of Hungry, why couldn’t the government just print the money and pay the printed money directly to the Russian government without making the money available to the Hungarian public? Is it because when the Russian government wanted to spend the money then it would simply be flooding the world market with Hungarian currency?
If all that extra money just goes to rich people, that won't cause inflation, since they will spend it on investment goods (which will inflate in price). There's only 1 problem though: housing is both a basic need and an investment good.
I can tell nothing seeing that it's profitable video as I hoped, yet never give please
It's not printing more money that's the problem, for government to create money to stimulate it's economy, they have to borrow that money which needs to be paid back plus any interest. This is what affected the likes of Zimbabwe and Germany in the 20's. Government needs to print/create money that doesn't need to be paid back and no interest attached. Abraham Lincoln did it and America's economy prospered. Sadly central banks eventually infiltrated America and was given exclusive power to create debt money that's also tied to interest. Today in the entire world all but a few countries have central banks. Therefore governments can't print/create more money, they can only borrow it and it's the tax payers that have to pay it back.
Look at it this way, every time America so calls prints more money, the money they owe gets larger. If they printed the money then no one would be owed that money. It's a trick of words, they didn't print it, they borrowed it.
Hyper inflation,shortage of primary needs,the law of supply and demand,overpricing, money is not form of currency but a paper or fiat money, shortage of primary needs,that means if an egg you just buy just only six or seven pesos it will become 100 or 1000 pesos because many people has many money use for buying.
You have no idea, its via loan issuance / fractional reserve banking
So you mean to say that Venezuela was economically booming that's why inflation became so high? So in every country that food prices are sky rocketing it's because economy is growing? I don't get it.
I think people are asking the wrong question, all you need to know why we can't print more money is at 5:30, but the real question nobody wants to ask is: what caused this big a$$ debt of 34 trillions?
will you really reply to any question in the comment section? XD
Terrado family share ....
when they are exact opposite arguments.
*Wonderwhy has left the chat*
Why paying off debt increase inflation. Doesn't government just give the money to creditor not give it to citize?
There are no free lunches in this world. There will be a day of reckoning.
WAIT, this is unbelievabl...
If Hungary gave all the money they printed to a different country to pay off debt, how does it cause hyperinflation in their own country?
Because it didn't. The reparations were not paid in pengő since USSR did not accept those currencies. I can give the example of Romania, they formed a joint-stock companies called SovRoms (basically a mix between soviet and romanian state shareholders) which produced goods that were sold to USSR at a preferable price for the buyer. Basically the reparations were paid in kind, not in currency. Hungary had others reasons for inflation, for example their biggest industrial center, which is basically their biggest city, the capital of Budapesta was nearly erased due to the war. A lot of what would see in Budapesta today is is historical, but rather what it was reconstructed after 1946. To rebuild that city when they were also bankrupt due to the war put a huge toll on investment and thus inflation skyrocketed.
08:02 One hundred trillion dollars. 😐🤣
Because paper is trash, not money.
Not sure ,but to me it seems like most of the money goes into the hands of fewer people, and they don't spend as much as most of the people. So there is a shortage of money. So if we take money from rich and disperse into poor society that will cause economic boom without printing money. Maybe?
US can, they have been doing it all along.
I still don’t get it 😂
The US should print infinite money
so, inflation is like carrot infront of mule
They are doing it anyway.
Why a government cant print more money and instead of releasing the money use foreign exchange to make it dollars and pay foreign debts
Goes brbrbrbbrbrbbrrb lol
Sounds like Venezuela
I think it's a great idea. They should print and pay off debt. Just don't pay for war.
Focus on the real, not the nominal. You wouldn't really want war. It's loss of a generation of Ukrainians.
That's bad.
Still do good things with the money.
Think in terms of the real. What do we really want to see more of (that the gov is best suited for).
I know you might say nothing, and that's fair.
Money creators can do this.
Don't worry about inflation. Buy assets and you're fine. They're your life raft.
Gov seizure of real assets is evil. Communist.
Gov printing money is fine. Don't buy t-bills. Don't pay for the privilege of lending to the gov.
Be well. Still, hold your gov accountable
Funny. I’m a socialist, and I had to use this video to explain to a self-purported capitalist why doing this will not solve world hunger! He thought (for some reason) that Quantitative Easing was a completely useless tool and that we should instead be using that money to pay for government services. Thank you for this video, to help me respond to such a bizarre argument.
the solution to this problem is cryptocurrecy like bitcoin or etherium
My question is if govt print money and engaged in only government expenditure not in freebies scheme of government like giving free money to people instead govt spends money in increase production and giving money for the worker/labourers .so in that case is inflation will be there?
What makes you think that federal dollars spent on "freebies" to people does not increase production? The people receiving those dollars turn around and spend them on goods and services that otherwise would not be produced. Federal spending is not inherently inflationary.
Your Definitions are wrong. Money is the best feedback signal to allocate energy and mass in the lease entropic way. Your conclusion are Wrong, everyone should be able to print money to drive it value to its actual value.
From what I heard from my friends who live in the USA, the prices of food, drinks, and other basic stuff increase on a practically monthly basis by more than 3%. The 3% is a level of inflation. The economy of the USA is falling apart... The 0,001% has access to the 95% of the whole capital of the country, so the government is trying to cover that up, but they are failing. I am so sorry for the average person in the USA because they do not deserve this... However, I hope that the political establishment and the richest ones will die in pure pain because of the all democracy that they spread in the world by destroying other countries and killing millions of people.
Not a valid answer bro
You wearing a mask? soldiers of God do have lists, eyelids wont bat xx
Ask Venezuela. They know it better 😂
So, so much wrong with this video. Get yourself some MMT, stat!
What's wrong with the video?
@@geoffreycharles6330 the factual inaccuracies, such as its reliance upon theories of the origin/function of money that are outdated. Anthropologists + historians haven't found any evidence for the story presented. And the state's willingness to take money as satisfaction of debt (i.e tax) gives money is value.
if you had some kind of information wich cud help us all than you better tell us what we have been doing wrong and not just Hate someon you 1. don´t know and 2. @EconomicRaven was abel to gett his job done so i could think about and make a decision myself if you don`t think to yourself you are worse than a Robot even they think before tey make a statement so learn about your own way to improve wihtout hurting Humans than you wil have a great live . peace out
Shut up
You need more than MMT to understand money and why this video is not so helpful. The big elephant in the room is that new money is primarily created not by the central bank, but by the commercial banking system on a constant ongoing basis - banks have the power to create money out of thin air …and then charge interest in it! Meanwhile the government which is the rights to create physical money, ends up borrowing and paying interest lol …just another way we get screwed by the 1%…
money can be use as toilet paper as long as people pof.! it never run out of value.