Printing money

[apw171]

Why do countries with debt (particularly the wealthier ones) not just 'print there way out of trouble' by printing more money to swell the coffers. I appreciate that in poorer countries with minor currencies that this would not be viable. But our government for example need a new hospital building in let's say Leeds why not print more money pay it into the treasury and bingo.

[Sammy Snake]

This question has been asked before this week - did you not get presented with a list of similar questions before you posted to see if it had already been asked?

Its at the bottom of this page.

[Loosehead]

Money has to be backed by something, if the government just printed money it would just water down the the rest, known as inflation effectively removing any value the new money created. In any case 99.9% of money is not in cash, most money spent or deducted as tax is not in cash, it is just numbers but those numbers represent something they represent wealth in some form. Most sensible governments have realised that you cannot just print money as all that does is create raging inflation, reference Germany and hungary in the last century. 

[stevie21]

Even if you think of it in actual cash, the government would have to pay lots of builders and architects to create this new hospital.
These are all extra wages that wouldn't otherwise be spent : ie. more disposable income in the general population and thus, more money being spent on the high street.

Laws of supply and demand state that the more demand, the higher prices are pushed (think, "ticket touts"). All of this results in higher inflation.
New Labour seem to be particularly offended by inflation. Maybe I've just noticed govt attitude to inflation more recently?

[stupid64]

Maybe I'm being thick,but on a sterling note,it states"I promise to pay the bearer on demand the sum of".

This must mean currency is only an "I.O.U"for an amount held by the Country in question in its gold reserves and overseas investments!

[stevie21]

stupid64, that's not an accurate interpretation : you don't have a guarantee that anyone has to hand you a gold leaf in exchange for a tenner.
We're no longer members of the gold standard
http://www.theanswerbank.co.uk/Money_and_Finance/Questio n115945.html

[Andy008]

Because increasing the cash supply and devaluing their currency against other could play havoc with foreign exchange markets, lead to job losses, and do all sorts of other nasty things that I'm really not qualified to talk about.