Verified answer

Not with Obamacare

edit we are the richest country in the world, but even we don't have enough dough to support this

edit # 2 worst non government (private sector workers=producers, that you Democrats tax for money, to support government "workers") payroll figures since FDR/Keynes, worse than Carter even

What is the economic effect of “printing” money for federal spending?

The Treasury can tax, borrow, or “print” money. While the economic effect of the procurement method is different in each case, the effect of actually spending the money is the same in all cases, independent of the procurement method. All federal spending is inflationary to the degree that it consumes scarce resources.

When the Treasury taxes the public, money is removed from the economy with a deflationary effect.

When the Treasury borrows by selling bonds, the bond-buyer swaps idle savings for bonds with no immediate economic effect. When the Treasury pays interest to the bond-holders, federal funds that could be used for infrastructure spending are instead used for paying the bond interest. Money is effectively transferred from infrastructure workers to the bond-holders, who will hoard it during a recession instead of spending it, as would a construction worker. This has a deflationary effect.

When the Treasury spends the borrowed money (deficit spending), it transfers money from bond-buyers’ savings to money in circulation, M2. Increasing M2 increases the M2/GDP ratio. This increase would be welcome if the existing ratio were too low for a prosperous economy and unwelcome if it were too high. Currently, our M2/GDP ratio is about 62%, about half of the ratio for Switzerland, the most prosperous nation in the OECD.

If the Treasury were to print the money there would be no immediate economic effect. When the money is actually spent, the immediate effect would be the same as for taxing or borrowing: consumption of resources. In addition, printed money always increases M2, whether or not the spending causes a deficit. Therefore, printing is now highly recommended. When inflation threatens to become harmful, deficit spending should be avoided, regardless of the method of financing.

In fact, inflation will far more likely be caused by bank credit than by federal deficit spending. During prosperity, bank loans create more than $30 out of thin air for every dollar of deficit spending. The Fed can cure that problem with its various tools.

Rational and judicious printing of money along with Fed guidance will bring and maintain prosperity.

Hey, we survived 2000-2008, so we are good to go through any hell on earth.

GW Bush basically destroyed the world. We'll be suffering for him for the next 20 years. GW Bush will go down in history as the Commodus of the American Empire. There has never been, nor will there probably ever be, a worse, more incompetent, destructive, vain and stupid man sitting in the White House ever again.

No one we could elect could be worse.

Only if we can get through the next 3 years. We're barely hanging on by a thread with the dimwit in charge.

Will the wolf survive?

You mean....the economy that now has the lowest unemployment rate since Obama took office? The economy that added 200,000 jobs last month? The economy where the stock market went from 6600 to over 15,000?? You mean the economy where the housing market is making a strong recovery?

You mean THAT economy?

The 2014 election will determine that but if the electorate keeps congress as it is no.

Can it survive another Republican deregulation bubble and real estate crash?

No it can't.

Hopefully. His time is running out thank god.

Let's hope so.