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Why can't the government just print more money to make everyone rich?

Why can't the government just print more money to make everyone rich?

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Asked by H.Donna, Last updated: Oct 03, 2020

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Patricia Allison

Patricia Allison

Patricia Allison
Patricia Allison

Answered Mar 13, 2018

There are two main reasons why the government cannot just print more money to make everyone rich. The first reason is that there used to be a gold standard, meaning that for every dollar in the economy there was actual gold to back that dollar, so that if needed, cash could be traded for gold, in theory.

We do not function on a gold standard anymore but our cash still needs to represent something in the economy. The second reason is that if the government printed more money, the inflation rate would skyrocket so high that the value of the U.S. dollar would be almost worthless. This would put the U.S., and the world, into serious economic trouble.

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