Topic: Question about inflation and debt. - page 3. (Read 870 times)

I don't think printing more money is any solution , since it decreases the bus of the country's own money and therefore the people would eventually have to use up more money and they will slowly deplete what they have and it will turn out to be a big recession , therefore I think it is not the solution.
Solution is improving education , jobs , everything which would eventually take time but it will improve the quality dramatically.

There are various ways on how the government pay off their debts. Countries can reduce its debt by manipulating the interest rate. Some country also have tried reducing debt by instituting budget cuts. These are some ways to reduce debts without increasing the tax. But I think most of the time, governments are increasing taxes just to pay their debts. That's why paying proper tax is important for the government.

Yeah right, but what are the solutions for govs in such situations?
I'd say they can delay the payment and stimulate the economy by focusing on it, whether it is domestic or foreign one.

This has been talked about a lot and you can find answers with a small google search but lets assume you will get the right answer here, even that right answer is not enough to cover all the information we can give you here and even if the answer we give is right, a president usually holds the power to do the wrong thing (seen many times) whenever they want as well so they can actually do the wrong thing.

Normally, nobody does that for the same reason everyone said, inflation. If you print out trillions of dollars to cover your debt, you will have a huge huge inflation and your money will be worthless, everyone will have insane amount of your money and will exchange it for another nations money and suddenly your money worth very little, nobody wants that for their own currency.

For the nth time of discussing it, printing money to pay debts isn't a good solution. If it's only that easy, why most countries are still in debt right? It's because they can't do that. Economically speaking, when you print too much money, it will lead to a big inflation or hyperinflation. Their money will start to lose its value because of too much money circulating the community. That situation already happen in some country in the history and it didn't brought a good result to their country. Printing too much money was never a solution for debts. They have to maintain the circulation of money.

The answer is "Only if the velocity of money is decreasing".

The velocity of money is the rate at which the money circulates. So say you get a loan from the bank (so money is being created with the loan), then you spend it on a car, that money goes to the salesman and the manufacturer, they in turn spend it on their mortgage and so on, and the money circulates.

The faster the money circulates, the greater the velocity and the greater the tendency to lead to inflation. In cases like that, the central bank will raise interest rates, to deter borrowing, and the whole cycle will slow.

If the velocity slows down (people arn't borrowing, and the money they earn is used to pay down their debts, this destroying money), then you can print money without causing inflation.

But if you print money while the velocity is high, then you end up like Germany in the 1920s or Zimbabwe now - with triple digit inflation.

Like most people here, I too believe just printing and extra $100 would just make the current $100 pretty much worthless. I don't see how barter can be conveniently used to counteract inflation. Sure you get an item more or less of the equivalent value of what you are giving away if you are good at appraising and negotiation but it's too much trouble and also inconvenient if you are going to do it several times for basics.

That would result in money losing its original value then taking in more debts to pay than actually solving it. That's the law of inflation and deflation, if there's to much printing money in circulation then the price will drop and the product's prices and commodities, will start to increase and eventually weakens a country's economy that could lead a finally crisis.

Not really a good way. It is a way, but not a good one. A bit of inflation in the economy of a country is actually good, since it let's the market develop and all of that, but exceeding a certain threshold would do more harm than good, which is not what the countries government is trying to do ( or at least, what their supposed to anw). That's why banks take and loan money, and not nonchalantly loan them towards the public. They use the money that is stored to them to loan to others, and profit off of that.

Bartering isn't really a good system, we can easily see that from it being almost non-existent these days. A value of an item is highly dependent on who the buyer is, so Bartering is kind of you taking advantage of the guy who needs the item.

If such country would do such act, not only it would produce worse inflation rates, but the institutions in which it took loan would lose trust on the government (US in your example), and alerts other lenders not to accept loans from US, since they would pay them worthless paper money. And trust is much more important than paying debt easily, since once US is in need of something that isn't available to them, they would have a hard time finding sources for such.

How to print money is not a good way to solve debt problem quickly. I feel that it is of little help but to reduce the value of the country's money. In addition, the impact of hyperinflation may destroy a country's economy, this is not the way we should choose. Even money printing needs to be minimized for many economic years. Zimbawae lost everything because it printed too much money to pay off the debt and now the result is that people there cannot grow anymore.

That's not a solution for a wide economic problem in a certain country. Producing more money is not the answer and will not help solve a country in debt. In a sense that, producing more money will lose the value of a price of a certain thing. In other words, it will lose the value of money. If there are a lot of money and all of us have money then, what's the sense of having it and paying other people when they don't need it already? The government should make their own way on how to overcome inflation.

No. Printing money was never a way to combat debt, more like, it increases it instead. There's the fact that it pushes the economy forward, but nonchalantly printing more money is not the way to go. Inflation is helpful for the economy but it must be managed and controlled to helpful levels.

As for bartering, nope. The currency system was developed because of the fact that Barter system involves unfair judgement most of the time. It involves the factor that the buyer "Needs" the item, which causes the item to go above the market price, which in the end ultimately defeats the concept of "fair trade".

paying off state debt by printing more fiat money is a very bad idea. as you said this will cause hyperinflation and a monetary crisis. in my opinion the best way to pay off state debt is to increase state revenues. by increasing exports from imports, trying to increase the yield of natural resources and trying to use and maximize domestic products. using barter systems I think it's very outdated and inefficient. rather than bartering, it's better to return to gold and silver or switch to using cryptocurrency.

Printing money can be the most convenient and quick solution to a country's financial problem but the side effects can be felt especially in the long run. This is just like robbing money from the people unless the printing is backed by value like gold or any other commonly accepted commodities. There is a big chance that if unchecked and uncontrolled this strategy can be a disaster as proved by a number of countries now suffering run away inflation rates. The solution is not barter, either because that is not already applicable in the global village that we are in. Actually, there is not a single solution on this regard because successful countries are usually using many sets of tools under their disposal, and they are implementing proven strategies suited to their circumstances.

No, it wont solve out the problem but rather it do worsen up the economic state of that random country.It isnt a valid reason nor does have a sense
just because of the plan on paying up the debt.We have seen the worst when it comes to inflation and no government will tend to go with that option.
We wont surely go back to that barter system and i dont see on how it would be relevant unless if there would be no option left/entire banking system failed totally.

Not really, no. US follows this to a larger extent, since their debt keeps exacerbating by the second, and one of the many things they do to try tackle it, is print more notes. It doesn't help the situation whatsoever, rather it escalates it to a much worse scenario. The money in the market increases, yet there's no return of that money in the hands of the government. Most people don't pay the taxes, and the factor of Rich get richer, and poor get poorer comes into play.  Printing more money only weakens the economy, not otherwise. Even if you try to print the equivalent amount of notes to the amount of global debt, it still won't make a difference. What will rather happen is, it will fuck up the demand and supply of the global economy, and things will go back to the same. Fair possibility is, the value of 1$ now, will be equivalent to value of 1000$ if more notes enter the economy.

How will Barter System help? It won't work even in an ideal world, let alone in a worsened imperfect world. Barter system's lack of providing the right value to the good/service was one of the main reasons it failed. The only way I see barter system coming back is through pure form of desperation, when the recession is killing the world and printed notes won't work. This was portrayed beautifully in Mr. Robot, where the whole corrupt banking system went down, and people had to resort to using crypto, and it was a catastrophe struck and no one saw it coming.

No, it won't be a decent way to pay debts. If that's literally a good idea then most of the countries did this already but there's an inflation each year and if a country prints more money, their economy will be negatively affected.
Law of supply and demand can also be applied to this, think of what will be the effect of too much supply of printed money in the circulation.

Printing money randomly to pay off debt is never a good idea. Look how worthless the currencies of Zimbabwe and Venezuela was back then because of reckless printing of money. The inflation killed their economy! The more money you print,  the less valuable your currency becomes thus increasing the prices of goods and services causing heavy inflation in the country.
Barter system also won't be a good way to settle debt. Think about the imbalances they will suffer when weighing the values of different goods to exchange.

Printing money to pay for the debts is never a good way for the nation and for the currency overall value in the global economy. Consider that an item is being sold for $10 and when there is twice the money which was printed, the item will become expensive and would be worth more than what it is intended to be. Here when the item becomes expensive, we would be seeing an inflation where the item is worth more than the money itself. This would counter the purpose of money and moreover repeated incoming of money in the form of newly printed notes would further rise the price of an item quite frequently.

We should be well aware of the inflation problems in Weimar Republic (Germany) where money became totally worthless and was abundantly found in the streets. Money abundantly found and printed would create further problems which would defeat the purpose of money on the whole. Gold is worth the cost only when they have limited supply, if there were unlimited supply it would get devalued like Dogecoin.  

As abhiseshakana said, barter would always serve the purpose when the opposite party who is involved in the trade is in need of the good which we are willing to trade with them. Money has become digital with the invention of bitcoin and can be stored in a mobile and can be very handy but barter doesn't go by the way.