Does the Government have unlimited money?

Question

This is a real question because people complain about our debt but the government spends a lot of money.

In: Economics

Answer 1

That depends on what exactly you mean by money. In theory, government can print unlimited numbers on its money. In 1946, Hungary printed 100 quintillion (100,000,000,000,000,000,000) Pengo notes.

The problem is: if there is too much money in circulation, people will demand more of it in exchange for stuff. Stuff includes other currencies. Using the Hungarian example, by 10 July 1946, the 100 quintillion Pengo note was worth about 0.0000000002 US dollars, significantly less than similar area of toilet paper.