Why can't we just print money to pay off debt?

A video looking at way you can't simply print money to pay off debt. And what has happened when countries have tried to! And for that matter why a country having debt isn't necessarily a bad thing. The only reason the US has the most debt is because the US dollar is considered the most trust-worthy currency and other countries see the US as a safe place to put their money. It would be worse it countries started buying debt of other countries and stopped putting into the United States. The debt may be a lot but it's actually not something that's an issue. The US will never 'pay-off' its debt because that's not how it works. National debt only becomes an issue if GDP isn't growing, which it is. A more accurate way to see when the debt is an issue is the debt-GDP ration. In which the US is fine in that respect. Whereas Greece and Japan have debt-GDP ratios of over 150%, which is bad. Also, keep in mind that the US owns debt of many other countries. In fact, for every $1 of US debt, the US holds $0.89 of foreign debt. Note: if you're having trouble understanding the whole 'long-scale' and 'short-scale' talk then please read this Wiki article: http://en.wikipedia.org/wiki/Long_and_short_scales MUSIC: Hammock Fight - Kevin MacLeod - (incompetech.com) Licensed under Creative Commons: By Attribution 3.0 http://creativecommons.org/licenses/by/3.0/ http://incompetech.com/music/royalty-free/index.html?isrc=USUAN1100213 IMAGES: White House: Matt Wade - http://en.wikipedia.org/wiki/User:UpstateNYer Assortment of Money - epSos.de Flickr users: Nick Ares(http://www.flickr.com/photos/aresauburnphotos/) Taki Steve (http://www.flickr.com/photos/13519089@N03/) Kevinzim (http://www.flickr.com/photos/86624586@N00/) (I wrongly credited ZeroOne in the video for the image of the Zimbabwean dollars, it's actually from Wikimedia Commons, and in the public domain) Wikipedia Articles: Hyperinflation - http://en.wikipedia.org/wiki/Hyperinflation Hyperinflation in Zimbabwe - http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe Zimbabwean Dollar - http://en.wikipedia.org/wiki/Zimbabwean_dollar Hungarian Pengo - http://en.wikipedia.org/wiki/Hungarian_pengo Names of large numbers - http://en.wikipedia.org/wiki/Names_of_large_numbers Helpful YouTube videos: 'Who much money is there in the world' by Vsauce - http://www.youtube.com/watch?v=w2tKg3E53DM 'Understanding the National Debt and Budget Deficit' by John Green of the Vlogbrother - http://www.youtube.com/watch?v=3ugDU2qNcyg Clip art from http://www.clker.com/ FOLLOW ME ON TWITTER: www.twitter.com/wonderwhy7439

Comments

1. Yeey, Hungary is first in something!
   
   Oh wait...
2. buys a loaf of bread Cashier: Hello, how may I help you? Me: I'd like to buy this loaf of bread please. Cashier: Alright, that's 100 MILLION DOLLARS. dies of shock
3. The accent is just not easy on the ears (plus the muffled voice)
4. If money grew on trees it would be as valuable as leaves... the leaves would probably be worth more than one pengo right before it was discontinued
5. I'm Hungarian
   and i never knew it was that bad...
6. So China still can cash in its bonds at any time and therefore hold our country hostage with trade and debt.
7. Thanks for this video.
8. What happens if I have a machine that makes money. I make 200,000,000$ secretly, every second. If I use that money to pay off my debts and expenses. What will happen to me?
9. Because inflation.
10. Nicely made video....
    
    Unfortunately, you are wrong...
    
    Please look into Modern Monetary Theory, for a truer insight into why we cant print money to pay off the debt. The answer is, we could, if we wanted to. But it would be a bad idea.
    
    Even so, £375 billion of new money was created in the form of QE, to buy back Bank of England Debt. And inflation remained low...... if what you say is true, then this should have caused inflation to massively increase, after all £375 billion is over £50,000 for every man/woman/child in the UK..... AND yet inflation still at 2% ?
    
    Modern money theory will tell you the reason.... if you're interested. And if understood, you'd realise that poverty can be cured easily, without destroying the economy or going into hyperinflation like you claim
11. people think. who controls the money controls the world.
12. Still don't get it .
13. I wouldn't even comment on this BS except it popped up in suggestions, so I assume others will watch it also. Using over simplified or extreme (everyone gets a million $$) examples is always the currency of charlatans or those who believe them.
    
    As long as there is potential in the economy to produce goods and services to absorb the currency there will be no inflation resulting from the currency supply. Even in the example of sports cars, it would be only sports cars that increase in price, not eggs and milk, so it isn't even actual inflation. External costs drive inflation much more often than the money supply ever has, ie: 70's when inflation was driven by the high cost of oil and the money supply was increased to enable people to buy the higher price goods. Even though the money supply increased, it wasn't what drove the inflation. It "followed" the inflation as the Fed used the tools it had to hold off disaster. Japan, and the US to a lesser degree, have been "trying" to devalue their currencies without much success. Japan's debt is now 200% of its GDP, and no inflation.
    
    Far too much of our thinking, and the advice of "experts", is rooted in the rules that applied to gold standard economics, or to our personal budgets, and should be cause for one to simply abandon having an opinion if they think this way. It's killing us. The debt is nothing more than a record of currency in the private sector side of the balance sheet that hasn't been "canceled" by taxation. It should be renamed "wealth" to give the public a better concept of what it represents. Also, taxes "DON'T" fund government spending, so there is no need to pull currency from the economy to spend it back into the economy. The issuer of currency doesn't need your currency to spend currency. ALL spending appropriations, not just those above the "revenue" from taxes, are funded by creating debt instruments at the Treasury. Taxes only serve as a pressure valve to the economy to avoid inflation and to create a demand for the currency. There is no "revenue" for the government. There is only canceled currency.
14. What about the first batch of money? They are printed too! So did every country start off with the same amount of money printed?
    
    What if a country runs out of its own currency? Do they print more then?
15. If everyone is in debt, then what's the point of debt.
16. Eat an apple.
17. ok question, what if a country spent literally all of its money to buy things with value, food, buildings, etc. and then printed all of that money back. what would happen then? there wouldnt be more money it would be the exact same ammount just that the country had a shit ton more real wealth now. so what would happen?
18. sextillion
19. Nice video.. it's gave complete information about why money just like that we can not print.
20. I love this channel