why the government doesn’t have infinite money.


why the government doesn’t have infinite money.

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They can print as much or as little money as they want. But if you can just make unlimited money, the value of that money goes down (it is called inflation). Same as old school baseball trading cards. If you have some rare card it’s worth a lot more. If everyone has a copy of that card, now it’s not rare and it is worth less.

A government can always increase the amount of money it has in circulation either physically or just on paper. The issue is they can’t increase the amount of goods available to purchase with that money.

As more money becomes available and the number of things it can purchase remains the same, then inflation is the result. Goods will cost more because of basic supply and demand.

Take a look at Venezuela for an example of how this pans out. When the money is worth less than the paper it’s printed on.

Hypothetically they actually do as they are the one and only group that prints the money.

The problem is that printing money ad infinitum depreciates the value of that money (i.e. it causes inflation). Money is, fundamentally, a store of value, and thus heavily inflating money makes it kind of terrible at storing value over time. Thus, it doesn’t matter if you print infinite money if no one wants said money.

They can create infinite money, but money by itself doesn’t really mean anything. Money is a medium that facilitates the exchange of goods and services. It’s the alternative to just trading goods directly. Infinite money doesn’t equate to an infinite amount of goods and services.