Now the question being asked is a good one. The everyday person that has not dived headfirst into economics is justified in wondering why a government can't just print more money to get out of debt. The question is doubly justified for an American since the USD is the king currency in the world and just about everyone in the world eagerly accepts
it.
The reason of course is inflation. The more money the government prints then the less valuable that money becomes. If everyone was given a million dollars, what do you think would happen to the price of milk? It would go from $4/gallon to $54/gallon or more. You would have more money, but the money would be less valuable.
Putting it simply, money is the thing you use to determine the value of something. It could be gold, paper, seashells, red colored rocks, or BTC. It doesn't matter, it is just the medium of exchange that is accepted.
The supply of that medium of exchange, in our case the USD, should correspond to economic activity.
Elon Musk makes Tesla's, and everyone wants one...GREAT! Use the demand for Tesla's to increase the money supply. However, the government can only give away things, they do not produce things. So, when the government has tapped out its revenue from taxing its citizens and it still has bills to pay for things like welfare, social security, and defense purchases it must borrow money. Sometimes it borrows from other countries, and sometimes it borrows from individuals and corporations (Yes, I am
simplifying here).
If the US gov. wanted to stop borrowing and pay off its debts by printing more money, than prices would skyrocket, purchasing power would plummet and hyperinflation and poverty would set in to society. This is why you should be very skeptical of Politian's that promise free things. Nothing is free and if anything is free it is only free because you already paid the
price elsewhere.
The only real way to pay off the US debt is for the gov to stop spending and to keep taxing its citizens while the citizens keep innovating and selling goods and services that are in high demand, so the money supply is increased by natural economic activity. Which of course would allow the gov to generate more revenue via taxes.
Now some Modern Money Theory (MMT) subscribers will say that government deficits are not a bad thing and can be used to jolt an economy towards fiscally responsible activities. This can be true if the government does something like investing in infrastructure improvements that are desperately needed for true economic activity to flourish. Even if the US increases its deficit, the improved infrastructure could
have a monetary benefit in the private sector if things are done properly and with local businesses in mind. THINK: Needed infrastructure so businesses can actually operate = Good deficit spending. More Free Healthcare in a system with too few doctors and nurses and already inflated costs thanks to lobbying = Bad deficit spending.
Either way, government deficits should not overly concern the everyday citizen in the US. The likes of a WW3 that ends in US defeat, or some other catastrophic event would need to take place to dethrone the USD as king and if that does happen than humanity may be starting from scratch. The thing that is actually concerning for the everyday US citizen is when the US government spends on something
that causes inflation.
We are already trillions of dollars in debt and sure this is bad, but other things are more problematic in terms of economics than the creator of the King currency being in debt. Like Government spending that causes massive inflation, or challengers to the USD throne.
