Printing Money
The Absolute Privilege of U.S. Dollar
As of May 2023, the standoff on the debt ceiling negotiation between the White House and U.S. Congress is causing concern and stress among us, the regular people, even though we have no control over the process or have no say in the negotiation.
The whole thing piques my interest to dive deep into how the U.S. dollar affects the fate of U.S. people, and why it matters. It comes down to the U.S. government's privilege of printing dollars as the reserved currency.
In this article, I will explain how the U.S. gained this privilege, how it enabled the U.S. economic prosperity, and what would happen if we lose it.
Why Printing Money?
Printing money simply means adding more physical or digital money into the financial system.
In American History, there were 2 times when the U.S. got off the Gold standard.
One occurred during the Great Depression (1929 -1933), when people hoarded gold, leading to a stagnation in economic growth.
To address this, President Franklin D. Roosevelt (FDR) made the decision in 1933 to abandon the gold standard. This move removed the constraint on the Federal Reserve, enabling it to increase the money supply during the Depression.
