PRINT MORE CASH AND SOLVE EVERYTHING

in Economics4 days ago

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Most of the world's problems are centered around not having enough money and since Governments welcomed the idea of Fiat money (money backed by trust in the government) why can't we solve the majority of the world's problems by printing more money and give to people to solve their problems.

But have you heard of hyper inflation? Many economists have suggested for the government to boost spending during depression and economic down turn and even John Maynard Keynes Suggested financing the economy in order to boost demand and kick start the economy instead of allowing the economy to fall into Stagnation which means a period of little or no Growth.

Therefore you are left with picking one option

Print money to save the economy during depression and risk inflation that can lead to hyper inflation

Or

Don't print money and risk stagnation which could trigger unemployment and many negative Economic metric.

But Irving Fisher made an interesting point concerning money supply

M × V = P × V

Which means that if money is printed and output is not adjusted to equal the amount of money printed then prices goes up (Inflation). That's more money chasing the same amount of goods doesn't work well. More money should mean more goods produced

money doesn't equate to wealth.

In conclusion if money is printed to increase output then is a good measure for the economy but circulation should be monitored.

But if money is printed just for spending then that's Toying with the economy

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Printing currency IS inflation. It's also a tax on everyone that holds that currency, so it discourages saving and encourages going into debt