The Federal government can't "print money," it can only borrow it.
I think the best answer is that the Federal Government wastes money. Actually, that is unfair.....please remove the word Federal.
thats kind of a bizarre claim.
Are you under the impression that private capital doesn't waste money? Or that it delivers fair value for payment rendered at a higher rate than governments do?
In life (not just within the context of this thread) I'm fairly sick of these underlying assumptions. They go unchallenged and unqualified, and entire ideologies are built on the rhetoric, rather than the substance of these ideas and claims.
To be accurate, our government (and any government presently on the face of the earth) does have both powers. It can both 'print' and 'borrow' money.
While the paranoid fantasies of the 'fiat currency' assclowns are a bit overstated, there is an undeniable truth that money supply proportional to denominated debt has the power to create wealth by reducing the value of debt.
This is the idea the powers the whole overcomplicated mechanism of dueling interest rates on both banks, consumers and lenders.
If you don't think those egregious penalty fees, additional charges and sliding interest rates on debt aren't the direct reaction to devalued debt ratios stemming directly from money supply manipulations, then you are sadly misinformed about the natures of our wealth modeling.
That said, it is also a fantasy that the government has either direct control or even the most powerful voice in the money and currency supply game. It doesn't.
If it did, then it would have simply waved its magic interest rate wand over the economy in december 2008 and John McCain would have still lost the election, but not by such an embarrassing margin.
And I am not talking about the stupid Federal Reserve conspiracy ridiculousness either.
While the Federal Reserve is a private organization composed of the largest bankers----formed specifically to help control the ebb and flow of the money supply---it is not true that the Fed has exclusive control over the economy, nor was it conceived as the only 'printer' of currency in the united states. It still does not have that distinction, incidentally.
More than half of our money supply was provided by the US Treasury, which printed competing bank notes right up until the Nixon Regime. There still isn't any real prohibition that keeps the treasury department from issuing notes for general circulation independently of any action of the Reserve. But at the time it was considered more profitable and less costly to allow the private Fed to handle notes which are passed around by the public.
The larger denominated currency notes, and other forms of currency such as treasury notes and bonds are still printed by the Treasury Department, as are many forms of privately printed bank currencies which are circulated amongst banks and bondholders.
Yes, the control over the so called 'money supply' is indirect.
devaluating currency is a way of alleviating debt, provided that the inflation rate is gradual rather than a body shock to the system.
But even though the mechanism isn't tangible, the government does print a form of retroactive wealth whenever it devalues the worth of the currency by expansion of money supply at a faster relative rate to the expansion of actual wealth to which it is allegedly tied.
This process, obviously has been accelerating as the US manufacturing base (upon which nixon originally pegged the derivative value of the currency after the abandonment of the gold standard) has fled the country and transferred over to the murky ownership of transnational corporations. There is less and less manufacturing value to which currency can be pegged, at a time when debt ownership has exponentially increased---exacerbating the impetus for currency (and therefore debt) devaluation.
It has made the mechanism of control very quirky and jittery, which is one of the great underlying reasons we are where we are.
It was a mistake to peg the national economy to real estate value, in my opinion.
Especially when government policy and social programs from the New Deal changed the pace and basis of Real Estate valuation to become utterly dependent on transportation policy.
But we have been creating this situation for more than thirty years, and it will take something transformation to pull us back out of it un under another thirty years.
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