Is money printed by Government, when added to the national debt, act like Counterfeit money?

[wellwisher]

This idea came to me yesterday. Counterfeit money looks like real money, but it is not allowed, even if it is a really good rendition. Artists make copies of famous art, but you cannot sell it as an original since it cause value to decline. Countries go to great care to make their money hard to counterfeit. The reason is counterfeit money impacts the value of real money. It is important to distinguish between the two. Altering the value of real money can lead to economic problems.

As long as you do not spend counterfeit money, but collect it like baseball cards, it does not create any problem. It is still illegal because there may be future temptation to add it to the money supply for goods and serves. Putting counterfeit money into circulation, adds imaginary value, in the short term but causes long term problems. You get a new cell phone and the merchant has a good sales day. This short term gain will have negative long term consequences. The merchant finds out, it is not real, so it adds to the merchant costs. With demand for cell phones the same, the law of supply and demand and the merchant's need to offset higher costs, causes prices to rise. It can cause inflation if done with $billions of counterfeit dollars..

One may argue that counterfeit money is simply money not printed by the Government, which is true. But I was thinking more in terms of the ripple affect of counterfeit money and printing more money to add to the national debt. The ripple affects are the same.

If we print more money, cover our debt, while not adding any new value, we create negative value; inflation. The tax revenues going to government also get a negative rate of return, due the increasing interest on the increasing debt. How is that different from spending counterfeit money, that also steals from the present and adversely impacts the future?

What would happen if we had a Constitutional Amendment that does not allow Government to print money other than to replace old worn money, or unless it is connected to genuine real time value added, such as growth in GNP and more employment. We get rid of money printing that acts as short term gain counterfeit money. It is the easiest way to lower national debt.

The analogy is I can light a piece of paper on fire by bring the fire to the paper, or the paper to the fire. These are different on the surface, but both have the same final affect.

 

[Revoltingest]

Both fiat currency & counterfeit currency
dilute the money supply. They have that
effect in common.

 

[Twilight Hue]

Crypto... *cough*

 

[Little Dragon]

This idea came to me yesterday. Counterfeit money looks like real money, but it is not allowed, even if it is a really good rendition. Artists make copies of famous art, but you cannot sell it as an original since it cause value to decline. Countries go to great care to make their money hard to counterfeit. The reason is counterfeit money impacts the value of real money. It is important to distinguish between the two. Altering the value of real money can lead to economic problems.

As long as you do not spend counterfeit money, but collect it like baseball cards, it does not create any problem. It is still illegal because there may be future temptation to add it to the money supply for goods and serves. Putting counterfeit money into circulation, adds imaginary value, in the short term but causes long term problems. You get a new cell phone and the merchant has a good sales day. This short term gain will have negative long term consequences. The merchant finds out, it is not real, so it adds to the merchant costs. With demand for cell phones the same, the law of supply and demand and the merchant's need to offset higher costs, causes prices to rise. It can cause inflation if done with $billions of counterfeit dollars..

One may argue that counterfeit money is simply money not printed by the Government, which is true. But I was thinking more in terms of the ripple affect of counterfeit money and printing more money to add to the national debt. The ripple affects are the same.

If we print more money, cover our debt, while not adding any new value, we create negative value; inflation. The tax revenues going to government also get a negative rate of return, due the increasing interest on the increasing debt. How is that different from spending counterfeit money, that also steals from the present and adversely impacts the future?

What would happen if we had a Constitutional Amendment that does not allow Government to print money other than to replace old worn money, or unless it is connected to genuine real time value added, such as growth in GNP and more employment. We get rid of money printing that acts as short term gain counterfeit money. It is the easiest way to lower national debt.

The analogy is I can light a piece of paper on fire by bring the fire to the paper, or the paper to the fire. These are different on the surface, but both have the same final affect.

In some UK cities, local communities have in the past printed their own banknotes, backed or linked to the pound sterling. The Bristol pound was one such currency.

"The Bristol pound (£B) was a form of local, complementary, and/or community currency launched in Bristol, UK on 19 September 2012.[1] Its objective was to encourage people to spend their money with local, independent businesses in Bristol, and for those businesses to in turn localise their own supply chains.[2] At the point of the close of the digital scheme in August 2020, it was the largest alternative in the UK to official sterling currency, and was backed by sterling." Wiki

 

[wellwisher]

Both fiat currency & counterfeit currency
dilute the money supply. They have that
effect in common.

80% of all US dollars in existence were printed in the last 22 months (from $4 trillion in January 2020 to $20 trillion in October 2021)​

Is anyone aware that 80% of the US dollars in existence were printed on the last 22 months( fro $4 trillion in January 2020 to $20 trillion in October 2021. This discussed in the link below. This all started with COVID and did not end when COVID did.

https://techstartups.com/2021/12/18/80-us-dollars-existence-printed-january-2020-october-2021/​

This printing of money has occurred while the National Debt rose at its fastest rate. Fiat currency is not backed by commodity value such as gold or silver. It is more of a gentleman's agreement based on stability of the Government that issues it.

The USA has added to the National debt, the increasing interest on that debt. This now reduces the value of collected taxes by about 15%. This makes everything in Government more expensive, since you need to borrow to make up for the loss due to the interest. There is less value added for each tax dollar, similar to inflation. This dual watering down of the money supply has resulted in persistent inflation. It is also leading some counties to lose confidence in the USA fiat currency, because the US Government appears to be full of boneheads eating all the seed potato, while building a house of (credit) cards.

 

[Estro Felino]

If we print more money, cover our debt, while not adding any new value, we create negative value; inflation. The tax revenues going to government also get a negative rate of return, due the increasing interest on the increasing debt. How is that different from spending counterfeit money, that also steals from the present and adversely impacts the future?

I give you an example.
The Government asks the FED to print billions of dollars to build 200 hospitals all over the country. In 20 states.

You introduce new banknotes, billions and billions of new banknotes, but at the end of the day, you have 200 brand new hospitals that are worth much more than those billions of dollars spent. They are worth the triple, in terms of state assets.

So no debt is created. Quite the opposite: the GDP has increased.

So the story of the inflation ...please...it's just Monetarist conjecture.