Question

Why we cannot print money to pay back the debt? (7 lines)

Please Solve As soon as
Thank's
Abdul-Rahim Taysir

Answer 1

Next, the federal government is not making money; it is one of the Federal Reserve 's work, the central bank of the country. To foster non-inflationary prosperity, the Fed aims to control the supply of money within the economy. If economic output rises commensurate with the amount of liquidity that is generated, printing money to pay off the debt will make inflation worse. As the saying goes, that will be 'too much money chasing too little items.

More money printing does not increase economic production – it just raises the amount of cash that circulates in the market. If more money is released, customers can demand more products, but if businesses already have the same amount of product, they can respond by selling up. Printing currency in a simplistic model would only spark inflation.