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Excess spending curbs inflation

Name: Anonymous 2007-09-24 19:40 ID:tfVoTz9g

Printing more money to take care of the economy causes inflation and hyperinflation.  Spending more money causes deflation or at least curbs inflation.  Therefore, more money can be printed and spent as long as it keeps an equilibrium through spending.  This is why Bush's budget has appeared to be out of control for both terms, why military and government contractor spending appears bloated and out of control, why it looks like we spend more on foreign aid than on domestic programs, and why people consider the annual budget to be wasteful. 

We NEED excess spending to take care of the amount of money we print each year, and because money is converted into goods and services, we end up with more future goods and services that allow us to do more things in society, whether it be construction equipment, new computers, or a new wing to a government building with extra staff meant to administer in a new but unnecessary department furnished with excess office supplies.  Don't cry about the interest on the national debt, or sending money to Israel, or high spending on a never ending war.  Our currency is not based on any commodity, so spending less and saving it up accomplishes nothing, other than allowing it to devalue naturally when it could have been converted to actual goods.  Money has to be spent fast to create more goods. 

People compare government spending to the personal spending of an irresponsible teenager who has maxed out credit cards.  But teenagers don't print money.  So when a kid naively asks, "Can't they just print more money and spend it?" the answer is yes.     

Name: Anonymous 2007-09-24 21:44 ID:6HSuEuz2

The money they print represents a percentage of the nation's spending power they now own, essentially they have raised tax without having to send out the IRS.

Name: Anonymous 2007-09-24 22:08 ID:XTzBUS7G

>>1

Not even close. 

The reason that we have inflation is that the government doesn't back the currency with anything in particular.  In the old days, dollars were worth a given weight in gold.  This prevented inflation because most of the time the worth of a commodity (absent an actual shortage) doesn't change much. 

By essentially printing more money, yet not having more gold to back it, the value of that dollar in your pocket decreases. 

if the dollar yesterday was worth .005 oz of gold, but the government printed 10x as many dollars last night, the dollar today only buys .0005 oz of gold, so the dollar has been devalued to the point where today's dollar is yesterday's dime.  Since the price of commodities doesn't really change all that much, you'll need 10x more dollars to maintain the same standard of living. 

Name: Anonymous 2007-09-24 22:16 ID:XThoQYTc

I dare everyone to not spend money for a day.

It's hard not to spend money because, well.. you need shit. More people should think harder about what they were buying (aside from necessities). Stop for a second and say "Do I NEED this pair of $75 pants, or do I just WANT them".

so calm down, masturbate, and stop spending money for frivolous things

Name: Haruko 2007-09-25 1:39 ID:FqXZwA8/

I have this to say.

The dollar, like all other currency, is not backed by gold, like  >>3
said. this does mean that the dollar fluctuates on a few more variables than just how much we print each year.

The dollar nowadays has what's called purchasing power. with a dollar you can buy a certain amount of another nations currency.

on a macro scale, the dollar inflates when other countries become more powerful.

on a micro scale the dollar will not move much. but thinking about things, if you buy a gallon of milk, and for some reason that gallon you bought pushes the company which you bought from       very high financially, the company would then produce cheaper milk, because that's how you get more people buying your milk. then with that same dollar you spent on milk, you could buy more milk, and deflation has occurred.





but! what we have right now is a situation where nobody is investing in the currency (dollar) nobody wants it. it is like a falling stock. this is a different type of inflation. you see we could just print more money, which does inflate the dollar even quicker, but that's not how you solve the problem.

what we have right now is two things, first the fed cut interest rates which makes people demand more. the demand rises (due to lower prices) for goods so people buy more goods. this creates more shortage, when we see shortage we see the prices rise. and when prices rise we see inflation {since your dollar buys less).
the second big thing that effects us is the amount of money we owe. if you think about the dollar as a stock, then america is it's company. when a company's liabilities out weigh its assets your company isn't worth very much.

Don't change these.
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