What, if any are the consequences if...

[Jabow]

What if any are the consequences if the Federal Government just printed Trillions of Dollars and gave each household like a million dollars every five years, and continue to collect the regular taxes etc. Would'nt that help the citizens, or everyone would just stay home and become couch potatoes?

I know theres something, but I'm not quite sure what it is. Maybe some one could help.

 

[wmublows]

Didn't the US print more money during the depression or something like that to help recover? It may also have something to do with supply and demand.

 

[juice]

Basically, then there would be super inflation in the economy which would be pretty bad.
I recommend you look through some introduction to economics information.
Here are some links that might help you
http://www.mises.org/efandi/ch18.asp
http://www.abelard.org/inflation.htm

 

[TTinCO]

It's really quite simple......increasing the amount of money lowers the value of the existing money-which is inflation.

 

[AceRothstein]

The Government doesn't print the money. There's nothing Federal about the Federal Reserve except the name. It's owned privately and our government actually borrows the money printed by the Fed. Some view this alone as unconstitional. The Constitution actually states that only congress has the right to coin our money.

Since we've been off the gold standard for some time now, our money is essentially backed by "faith", and having the strongest military in the world keeps that "faith". We're on what's known as a fiat monetary system.

That "bank note" in your pocket is really a note of debt.

We also operate on a fractional-reserve banking system. Basically all this means is that the Central banks and reserve banks only keep a fraction of the deposits on hand to use for withdrawals. They take the rest and invest it at interest. This is where they make their profits.

Now if some huge crisis happens and everyone rushes to the banks to get their money out, the banks aren't going to have any left to give them at that moment. The Great Depression.

Now as others have pointed out, your example above would create hyperinflation. Basically right now you can buy a gallon of milk for say $2-3. If our currency were inflated, that same gallon of milk could cost you $300. That's actually a mild figure if you consider that after WW1, people in Germany literally had to carry money in wheel barrows just to buy the basics like bread. You don't need to look back that far to see the consequences of hyperinflation. Some pefects examples within the last 2 decades would be Poland, Russia, Yugslavia in the 90's, Argentina, Brazil, and Chile. Not a pretty picture. It's all about the "spending power" of that note.

Besides, the internal damage inflation can create, the international consequences would be dire if the U.S. were to do that. Most of the World's currency is pegged to the dollar in one way or another. This would create a catastrophic domino effect.

On a related note, the IRS isn't government controlled either, which is commonly believed. It's also privately owned and ran.

Sorry to be so long-winded, but this is a topic that more and more people will wish they were educated on, the way things look like they're heading here.

 

[RobFunk]

ACE, Sharp post

 

[AceRothstein]

ACE, Sharp post

Thanks.

I probably could've saved some time writing that though.

I just noticed the excellent links juice posted.

 

[Dawoofdaddy]

This topic has been greatly discussed in political forum.

 

[levistep]

What if any are the consequences if the Federal Government just printed Trillions of Dollars and gave each household like a million dollars every five years, and continue to collect the regular taxes etc. Would'nt that help the citizens, or everyone would just stay home and become couch potatoes?

I know theres something, but I'm not quite sure what it is. Maybe some one could help.

You would have to take a 18 wheel truck filled with money to go grocery shopping. Here is a post WWI German woman fueling her stove with German money because it is worth less than firewood because of hyperinflation.



http://en.wikipedia.org/wiki/Hyperinflation

 

[Jabow]

Thanks Ace,

Question, you mentioned about the us not owning the Reserve, who owns it, same with the IRS, who's running this thing?

Also, I understand about the inflation, but, what if there was price control on the items, then they should not go up right?

 

[RobFunk]

wikipedia is amazing

 

[AceRothstein]

Thanks Ace,

Question, you mentioned about the us not owning the Reserve, who owns it, same with the IRS, who's running this thing?

Also, I understand about the inflation, but, what if there was price control on the items, then they should not go up right?

The short answer is international banks. Some of the more notable families behind the international banks and their interests are; Rothschilds, Schroders, Harrimans & Browns, Morgans, Rockefellers, Kuhns & Loebs, Lehman Brothers, Carnegies, and Mellons. Now they're all hidden behind corporations, trusts, and banks. Bank of England, Chase, World Bank, International Monetary Fund, etc...

The I.R.S. is just a bagman/repo man.

When you start messing around with price controls on commodities, the money is still devalued so international trade would still be toast. Domestically it would open the doors to a huge underground black market. This has always been the case historically. Corruption would be rampant. You basically get what we saw not too long ago over in the U.S.S.R./Russia, or post WWI&II Germany where things like American cigarettes were worth their weight in gold. Eventually it will collaspe unless you open up the free markets (China).The money is just a tool, people are still going to find ways to trade goods and services, they'll just find another object to commonly agree upon and ascribe percieved value to.

Some good books for further reading:

The Creature from Jekyll Island by G. Edward Griffin

The Case Against The Fed by Murray N. Rothbard

Some good DVD's:

Commanding Heights: The Battle for the World Economy

I think you can view this whole 3 disc series on PBS's website. They used to have a whole subsection of their website dedicated to it.

Life and Debt

This is a great documentary that gives you a good look at how the IMF and World Bank do business. It's about Jamaica and their economic ills and how backwards their economy has become after the IMF came to their "aid".

All of these are available on Amazon or any good public library.

 

[Derek12]

You would have to take a 18 wheel truck filled with money to go grocery shopping. Here is a post WWI German woman fueling her stove with German money because it is worth less than firewood because of hyperinflation.





Can you picture that now?? You'd need a super cargo pants with a least 50 pockets to put all your money in when going out shopping.

 

[AceRothstein]

wikipedia is amazing

It truly is.

I just read an interesting article about the man behind wikipedia in either Fortune or Forbes. His name slips me, but he basically runs wikipedia as a hobby. He makes no money off it and it operates off of donations. They only have one employee.

 

[AceRothstein]

h**p://www.forbes.com/egang/forbes/2005/0905/122.html

Jimmy Wales is his name.

h**p://www.pbs.org/wgbh/commandingheights/

Link to the Commanding Heights series, you can watch the entire 3 part series online for free.

 

[RobFunk]

Thanks Ace, I'll have to check those out sometime.

 

[Dawoofdaddy]

Thanks Ace,

Question, you mentioned about the us not owning the Reserve, who owns it, same with the IRS, who's running this thing?

Also, I understand about the inflation, but, what if there was price control on the items, then they should not go up right?

If price controls were placed on particular goods, then those goods would not be supplied by the market....shortages.

Simple example is gasoline in Asia. Many governments place price controls and then people wait for 3 hours to fill their tanks for little gasoline is available when priced below "market" price.

 

[johnskelington]

If the world were square would we all fall off? Or at least have to spend our lives driving to the next side to hop over the edge at just the right moment.

So many questions so little time.