Why can’t we just print money to pay off debt?

Why can’t we just print money to pay off debt?

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Published on Aug 31, 2013

A video looking at way you can’t simply print money to pay off debt. And what has happened when countries have tried to! And for that matter why a country having debt isn’t necessarily a bad thing. The only reason the US has the most debt is because the US dollar is considered the most trust-worthy currency and other countries see the US as a safe place to put their money.

It would be worse it countries started buying debt of other countries and stopped putting into the United States. The debt may be a lot but it’s actually not something that’s an issue. The US will never ‘pay-off’ its debt because that’s not how it works.

National debt only becomes an issue if GDP isn’t growing, which it is. A more accurate way to see when the debt is an issue is the debt-GDP ration. In which the US is fine in that respect. Whereas Greece and Japan have debt-GDP ratios of over 150%, which is bad.

Also, keep in mind that the US owns debt of many other countries. In fact, for every $1 of US debt, the US holds $0.89 of foreign debt.

Note: if you’re having trouble understanding the whole ‘long-scale’ and ‘short-scale’ talk then please read this Wiki article: http://en.wikipedia.org/wiki/Long_and…

MUSIC:

Hammock Fight – Kevin MacLeod – (incompetech.com)
Licensed under Creative Commons: By Attribution 3.0
http://creativecommons.org/licenses/b…

http://incompetech.com/music/royalty-…

IMAGES:

White House: Matt Wade – http://en.wikipedia.org/wiki/User:Ups…
Assortment of Money – epSos.de

Flickr users:
Nick Ares(http://www.flickr.com/photos/aresaubu…)
Taki Steve (http://www.flickr.com/photos/13519089…)
Kevinzim (http://www.flickr.com/photos/86624586…)

(I wrongly credited ZeroOne in the video for the image of the Zimbabwean dollars, it’s actually from Wikimedia Commons, and in the public domain)

Wikipedia Articles:

Hyperinflation – http://en.wikipedia.org/wiki/Hyperinf…
Hyperinflation in Zimbabwe – http://en.wikipedia.org/wiki/Hyperinf…
Zimbabwean Dollar – http://en.wikipedia.org/wiki/Zimbabwe…
Hungarian Pengo – http://en.wikipedia.org/wiki/Hungaria…
Names of large numbers – http://en.wikipedia.org/wiki/Names_of…

Helpful YouTube videos:

‘Who much money is there in the world’ by Vsauce – http://www.youtube.com/watch?v=w2tKg3…
‘Understanding the National Debt and Budget Deficit’ by John Green of the Vlogbrother –http://www.youtube.com/watch?v=3ugDU2…

Clip art from http://www.clker.com/

FOLLOW ME ON TWITTER: http://www.twitter.com/wonderwhy7439

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