Economics Questions

Re: Monetizing Debt

JCCh — Mon, 10 May 2010 23:25:44 GMT

Thanks guys for your wonderful answers. I appreciate it.

Re: Monetizing Debt

Smiling Dave — Mon, 10 May 2010 23:15:17 GMT

What would happen to the U.S. economy if the money was sent overseas to pay off our massive debt or bailout other countries instead of being used as poor loans to American businesses or citizens.

Say we send it over to China or Greece. What will they do with all the dollars, paper their walls with it? They will just bring it right back here to spend, or more likely, lend to the US govt so it can spend. So it's the same as if the govt printed it and kept it here in the first place.

Re: Monetizing Debt

krazy kaju — Mon, 10 May 2010 23:14:03 GMT

The value of the dollar would collapse and inflation would skyrocket since banks/countries would use the new dollars to buy the currencies of other countries (e.g. Euro, Yen).

Re: Monetizing Debt

z1235 — Mon, 10 May 2010 23:12:09 GMT

Last I heard you can buy US stuff with US dollars from anywhere in the world.

Re: Monetizing Debt

JCCh — Mon, 10 May 2010 23:01:08 GMT

What I mean by "inflating here" is by printing the money and pushing it through the U.S. banks like with the housing bubble. What would happen to the U.S. economy if the money was sent overseas to pay off our massive debt or bailout other countries instead of being used as poor loans to American businesses or citizens.

Re: Monetizing Debt

JCCh — Mon, 10 May 2010 22:58:11 GMT

Sorry, I screwed up on posting the question. I reposted it correctly. Thank you.

Re: Monetizing Debt

krazy kaju — Mon, 10 May 2010 22:57:03 GMT

What do you mean by "if new money is sent overseas instead of being inflated here?"

Monetizing Debt

JCCh — Mon, 10 May 2010 22:55:34 GMT

I've been hearing a lot lately about Ben Bernanke's recent questioning by Ron Paul concerning monetizing our debt and bailing out other countries. Just for clarification, what would be the specific repercussions for the U.S. economy if new money is sent overseas instead of being inflated here? Would we still have the same business cycle as the housing bubble or something else?