Could we print money ONLY to pay off the world debt?

The printing of money in the US is an interesting thing. The Federal Reserve determines when to print money and the Treasury actually prints it. The Treasury is not allowed to print money on its own. And if you were to have the Fed tell you to print money to pay off your national debt, it would be like paying off your Visa card with your American Express card.

Doing so would likely lead to hyperinflation and a collapse of the currency’s value, as excessive money supply without a corresponding increase in goods and services drives up prices.

As a child, I thought my parents could buy more things just because they had more checks in their checkbook.

A shortage of money is not whats causing countries debt

No. Money is fungible, which means that it loses its identity once in the money supply. There is no such thing as “money for debt” – it is simply money and can be used (and would be used) for anything.

@Forever_Free is 100% correct. Adding zillions of $$ would cause massive inflation.

That is what the Weimar Republic tried after WW1 to pay for the imposed reparations. It resulted in hyper inflation.

On the small upside of course, if you have personal debt, from medical expenses, university, or falling afoul of the mafia, you can easily pay off your debt once you have a 1 trillion dollar bank note.

@ragingloli well the US is currently experimenting with early 20th century german policies so maybe they’ll give it a try

No, it would cause inflation, the jellies above who mentioned that are correct.

The interest alone on our deficit in the US is something like $800 billion a year. If we just reduce our debt in half it would be a huge savings for the American people. Paying down the debt, which means Americans need to spend more on taxes, would actually save them money in the end, much like paying early on a mortgage, as long as spending is being controlled and the payment is actually going to reduce the deficit. Every time the government spends an extra dollar it actually costs us more, because there is interest on the dollar. If we didn’t have a debt, we would not have to pay the interest.

Okay. I thought by stealthily printing more money and paying it off without telling anyone we could circumvent inflation.

You would have to tell the people who you are paying, at least.
And then you would have to answer questions from the public, about where all the debt went.

I didn’t think this question through.

@JLeslie is naive to think that if we reduced national debt by half ($400B) that the country would be better for it.

It will never happen. Congress would immediately take the $400B and use it for something else. Aircraft carriers, guns, churches, National Guard, etc..

Not one cent would go (a) to the citizenry, (b), to cultural or humanitarian needs, (c) hospitals, (d) education, or anything seen as helping people.

I think a better idea would be to declare all excessive debts void, without adding money.

The global economy, especially the banking system with interest on debts (especially, compound interest), is a direly foolish and broken rigged game, that was decisively won by the inter-owned large banks of the world, decades ago.

That game will need to be invalidated sooner or later.

I think that’s part of what’s going on with oligarchs wanting to seize as much power as soon as possible. They’ve also for decades sensed that eventually, the overwhelming majority of people will have almost no economic power, and will then be rightly irate that the economic game tells them they don’t get access to basic human needs.

So they’ve been trying to get in position to win the next game they see coming, where they expect most of the people to want to end the first game, and possibly want to do away with the people who were winning the old game.

@Zaku the problems with that (all excessive debts..)

1) who decides what is excessive? A million dollar mortgage could be considered excessive, but lots of people have them.

2) what about the people who are owed the money? If there is a debt, someone is doing the paying and someone else is doing the receiving. So are the banks, or governments that loaned the money – simply out the money? That doesn’t seem fair either.

@elbanditoroso

1) I was not presenting a fully-developed plan. I was just saying that in general, I think a better idea for a general type of approach, would be to forgive debts, rather than print money to give the the debt-holder.

Printing money causes inflation. Forgiving debts just removes the debt, meaning:

2) the creditor is impacted, but in my opinion, most untenable debts are held by banks and debt-mongers who tend to be extremely wealthy by means of exploiting compound interest on debts whose basis is often questionable, and also when people can’t reasonably afford to pay them off, it creates an inhumane and unjust situation. In many or I expect the overwhelming majority of cases where someone or some nation is trapped in debt, the debt-holders in my opinion absolutely deserve to lose those debts, and have probably already obscenely capitalized on human suffering.

I also think exploiting debts with compound interest is itself is essentially immoral, starting with the fact that it’s a cornerstone of why there is obscene and ever-growing wealth inequality, and why one inter-owned group of banks has owned most of the wealth on the planet for decades, and why that situation is only getting worse.

I’ll first answer you assuming you only mean government debt.

What you’re proposing is a massive asset swap. Basically interest bearing bonds for non-interest bearing money.

Bond holders are mostly banks, governments, and various financial institutions. They would all be flushed with something over $100,000,000,000,000 and be wondering what to do with all of that.

In principle, I’m not against abolishing bonds, since it’s basically just the finance sector collecting rent whenever a government wants to spend (even when many governments can finance their spending at 0% but simply chooses not to).

Without proper regulation, oversight, massive structural changes and democratisation of banking and finance, the former bondholders would probably just create lots of new asset bubbles and maybe buy lots of new yachts and private jets.

Inflationary pressure would depend on what exactly these financial institutions do with their $100 trillion in liquidity.

If you mean both government and private debt, it’s different. Paying off a private debt destroys money because the principal is conjured by the bank, and is destroyed when repaid. The bank is left only with the accrued interest payments.

In the end, ordinary people would have little to no money for anything and have to resort to barter or maybe finally have a communist utopia in a moneyless society, and financial institutions would have what’s left of the money supply.

@elbanditoroso That’s why so wrote in my answer as long as spending is being controlled and the payment is actually going to reduce the deficit.

I also think it’s more likely the government will spend it or if Republicans are in cut taxes more and wind up behind the 8 ball again.