What is money?
Simple question for some of us naive people. What is money?
If money is piece of paper, printing more is a good idea. Everybody can have some.
Wait! German learnt the hard way. It causes inflation.
So, why is all feds of the world printing more?
They are worried about deflation. They say! They need to "inflate". They need to utilize the "current exceess capacity" in the economy. They can do that, if they print money, distribute it. So that, everybody else can buy more milk, bread. So, instead of throwing milk away (excess capacity), you can use it.
What a noble thought!!!!
What is wrong with this?
Well, that is what socialism is. So, what was wrong with socialism? Why did USSR fail? Why did China abandon communism?
If we get free food, what do you think we will do. We will produce more population! Create more misery in the future. Create USSR, and fail!
More population means more resource consumption. That means more oil, food, metals and more of everything.
What suffers? Environment. So, wait... Am I suggesting that printing of money is going to create environmental issues?
Tell me where did I get it wrong!
Subscribe to:
Post Comments (Atom)
Why does everyone say that printing more money will result in more resources being created? If the amount of goods created is same, then printing money will do no good. Lets just go back to the days when we had barter system and use money just a means of convenient exchange and nothing more than that.
ReplyDeleteThere are three aspects to it...
ReplyDelete1. Decisions for printing more money are taken by politicians. First they need to win next election and second if there is deflation like situation, ensuing misery can destabilize democratic systems.
2. Assumption that population will increase is erroneous. In the Development paradigm banking on education and access to information (these were two big shortcomings of USSR and communist China era), population should decrease albeit with a little lag.
3. In the resulting prosperity environment actually improves, as consumption becomes discrete and quality based. Although, I agree that first wave of prosperity usually brings binge.