Question about inflation and debt.

[webtricks]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

Would the barter system be a good way of combating this?

Not barter but a universal credit rating system can help in facilitating foreign exchange market. Every item of international importance should be given some fixed rating for example, one gallon of petrol worth 5 ratings while 100 kg of onion worth 4 ratings, etc. These ratings could be periodically adjusted due to variation in supply/demand.
Now any country can import goods from any other country without paying real money. The whole system will work on credit system. Debt of one item can be paid off using the credits earned by exporting other items.
If any country is in need of cash flow then it can sell the credits to certain mediator like IMF/World Bank which pay the equivalent amount in fiat currencies by assessing the country's economy. Stronger economies will get better exchange rates for their credits as compared to weaker economies.

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[Hallmader]

The barter system was a primitive way of doing things that could hardly be applicable to the kind of commerce we have in this modern times. The large-scale commercial transactions of today cannot be supported by a simple barter system. And that is perhaps how it is being replaced with a more efficient means of doing transactions a long time ago. We used gold, silver, copper, and other precious stones to make things easier.

Printing money out of thin air is a rampant problem. And the solution is not barter. The solution is crypto. There is no cheating or faking in crypto.

I could also see that using the barter system for now is just solving problem with another problem. The fact that crypto is limited supply could bring an end to the massive money printing and therefore saving the whole economy from being overly inflated as well as eliminating any worry that lingers around the people. But, if the crypto being used have a little value and just stuck there, I doubt it will be any better for the whole economy compared to paper money.

The value of crypto will be determined by the people itself. So if it is low, it does not matter much for as long as it is quite stable. Even if the price of Bitcoin will reach stability at around $5,000 or even $1,000, it does not mean to say that paper money is going to be better than it. However low the value of Bitcoin in USD is, it still does not take away the features which makes it a world better than fiat. It remains decentralized, borderless, fairly anonymous, and so on.

[coinfinger]

The easiest way to solve your debt as a nation has always been selling stuff you have. Many nations in the world has debt and they found the solution to actually sell the "company" that they have, not every country is like USA where nothing is nationalized, some of the biggest airlines in the world for example is owned by their nations because going into it requires too much money so they end up doing it as a governments.

However, that only slows down the issue, you can no longer have any debt at all, back to zero, however if the issue why you had a debt still continues there is a level where you won't have anything to sell and you will still have debt. If you could limit the things you buy from other nations and start selling more and more to them, you can recover the difference as well.

[drachman]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

Would the barter system be a good way of combating this?

Unless there is a world war we are not going back to the barter system, what a country is doing by printing currency like that to pay their debts is the equivalent of fraud, they were lent a certain amount of money that at the time bought a certain amount of goods and now they are repaying their debt with money that is worth a lot less, and by doing this they are stealing from all the people that have worked hard to make the economy of the country a success.

[NathanJB]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

Would the barter system be a good way of combating this?

That is already happening right now but that printing of questionable extra bills are exclusively done by the governments and their banking cohorts. It is not done for the sake of the people who don't have enough to even pay their personal debts and basic needs.

[julius caesar]

If you are going to print an additional money just to pay the debt of the said country, the value of the money that the country has might become a trash or might lessen its value since the volume or the supply of that money is high. Meaning, the higher the supply, the more chances that its price might go down like what happen in the Venezuela. The value of their money became useless that is why they decided to have their own cryptocurrency.

[senne]

If a government prints its state currency to pay off international debts which are usually in the form of T-bills, then that money will enter the country only. The value of your currency will fall down and at the end the excess currency will lead to inflation.

This won't at all work without avoiding inflation and lower fx rate. Moreover, most of the debts are in the form of dollars and printing dollars isn't legal everywhere. 

[Paycoinzzz]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

  Money printing can be applied but that is certainly the worst way I have ever known. Venezuela has been insolvent due to too many people and too much investment in social security. At that time, their public debt was too great and Maduro decided to print money and now their country seems to have nothing left. we should pay our debt in other ways, by economic contracts and other things. never deal with cash, it will make the economy go down.

[Brunus]

There is always someone who does not understand that money is not value, but only a representation of value.
Money - if it is not based on real wealth - is only paper.
So, no: printing money is absolutely useless, only to create problems for citizens.

[criza]

There is always someone who does not understand that money is not value, but only a representation of value.
Money - if it is not based on real wealth - is only paper.
So, no: printing money is absolutely useless, only to create problems for citizens.

If money printing can be the solution, there would be no country in the world that would have debt. Certainly, the impact of printing excess money would cause undesirable effects to ones economic status. Printing excess money to pay debt would only damage the integrity of it, losing its value and in return, would cause economic crash. A country must solve the problem by not adding more problem like, continuous innovative strategies and attracting foreign investors to increase economic income to lessen debt.

[deisik]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less

It would be bordering on insane not to use this to your advantage

However, it would be unwise to print that $100 bill and pay the debt back in full. If you do that, you indeed pay out the debt, but you also destroy your printing power, the power of your money, and that makes no sense at all. What makes sense, though, is printing the interest on the debt. In this way you make your creditor happy as he receives interest, while you are also keeping your debt manageable without seriously devaluing your currency

Would the barter system be a good way of combating this?

If by that you mean paying the debt with some real asset, well, it may pan out, to varying degrees. But you should also take into account and thoroughly examine the possibility that this particular asset becomes dirt cheap in the future

[yulionoo]

printing more money to pay off debt is not a good solution because it will make the value of the currency go down as happened in zimbahwe. and using a barter system is also not a good solution. because the barter system is very inefficient and it will be difficult to determine the value of an item. in my opinion the solution so that the country can get out of debt bondage is to increase domestic industry so that state revenues increase and reduce imports.

[Captain Corporate]

 Barter system is usually better for developing countries, the major ones do not really posses too much that they own that they can give away in exchange of their debts. For example in developing nations, there is not much money in the private sector so the government has to take things in their own hands and with the taxes they collect they build business that will help the public, however after a certain period they realize they have too much debt that they are having trouble even paying the interest on it so they give their governmentally owned business to someone in exchange for a lot of money and pay their debt so they can get a breather and at least not have trouble with their interest rates at least, they think they may solve the rest better after the interest goes down a lot, some succeed it, some fail even afterwards.

[bitbunnny]

Printing money is a good idea only if your currency is a reserve currency. Otherwise like the others said, you will end up like Venezuela.

How do you think USA get away with it? It is because no matter how much they print, there is still demand. (Or was)

The danger is, now countries like Russia, China, Iran and even some European countries want to use something else. (Euro or gold backed crypto) When this happens, USD will lose its demand.

Printing money is never a good idea. At any circumstances that could only lead to economic devastation. Once you're deep in debt the only sustainable solution is growth of business and industrial production but for such countries that is very slow and painfull process, often without results.
Btw. to my opinion Euro is strong and stable enough to fully support european economies.

[Amel]

The answer is very simple, if you ask whether such a method is good? then you just see if there is a country that implements the system as you say now? certainly not. Every country has thought about the risks before taking action and I think something like that is suicide, maybe you want it to be like a crisis in Venezuela.

[CarnagexD]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

Would the barter system be a good way of combating this?

Not barter but a universal credit rating system can help in facilitating foreign exchange market. Every item of international importance should be given some fixed rating for example, one gallon of petrol worth 5 ratings while 100 kg of onion worth 4 ratings, etc. These ratings could be periodically adjusted due to variation in supply/demand.
Now any country can import goods from any other country without paying real money. The whole system will work on credit system. Debt of one item can be paid off using the credits earned by exporting other items.
If any country is in need of cash flow then it can sell the credits to certain mediator like IMF/World Bank which pay the equivalent amount in fiat currencies by assessing the country's economy. Stronger economies will get better exchange rates for their credits as compared to weaker economies.

This could be the solution to Venezuela's hyperinflation rate as of the moment. The country's been in a bad debt lately and their money pretty much is worthless right now. They have little to none to work out, so basically what they could just do to alleviate this is to sell stuff they already have. I don't further details regarding the issue in Venezuela's economy but as I was saying thsi could be a viable solution.

[worle1bm]

The answer is very simple, if you ask whether such a method is good? then you just see if there is a country that implements the system as you say now? certainly not. Every country has thought about the risks before taking action and I think something like that is suicide, maybe you want it to be like a crisis in Venezuela.

Smart answer. Setting off debt with something in return could disturb the economy lot more than inflation does. There are lots of complications in substituting current debt set-off method with barter, among which the most prominent is double coincidence of wants. If country A doesn't produce anything worth significantly to country B then A will never able to take debt from country B.

[webtricks]

If a random country is in debt, is printing money a good way to pay it off at the expense of the citizens?

For example, lets say you owe an entity $100. If you print an extra $100 bill you pay off your debt, but unbeknownst to the entity the $100 that they lent you is now worth less.

Would the barter system be a good way of combating this?

Not barter but a universal credit rating system can help in facilitating foreign exchange market. Every item of international importance should be given some fixed rating for example, one gallon of petrol worth 5 ratings while 100 kg of onion worth 4 ratings, etc. These ratings could be periodically adjusted due to variation in supply/demand.
Now any country can import goods from any other country without paying real money. The whole system will work on credit system. Debt of one item can be paid off using the credits earned by exporting other items.
If any country is in need of cash flow then it can sell the credits to certain mediator like IMF/World Bank which pay the equivalent amount in fiat currencies by assessing the country's economy. Stronger economies will get better exchange rates for their credits as compared to weaker economies.

This could be the solution to Venezuela's hyperinflation rate as of the moment. The country's been in a bad debt lately and their money pretty much is worthless right now. They have little to none to work out, so basically what they could just do to alleviate this is to sell stuff they already have. I don't further details regarding the issue in Venezuela's economy but as I was saying thsi could be a viable solution.

This system won't work for selective countries. It has to be adopted by all countries unanimously. I just took a hypothetical case but in order to make this system anywhere near reality, there are lots of adjustments needed to make. First of all, current debts for every country from every country should be accounted for. It is wrong to start with zero credit for every country.

Second and the most important step would be to fairly assign value/credits to every item. In 4th Ministerial Conference of WTO held at Doha, developed nations played smartly and reduced tariffs on raw materials including agricultural product significantly. However, tariffs on final products weren't included in trade negotiations. As a result, importing raw materials from developing nations become cheaper for developed nations but they still selling final products to developing nations at higher price. If such trade manipulations are made in calculating credits then the above said model will fail like inflation-based currency debt model.

[FanEagle]

It’s not an easy task for any country to pay off it’s debt, there is no simple way to do that. If it was easy as most people think it is, then a lot of countries would have done that. It’s just like a business, it’s not everyday you’re able to trade your way out of the position.

But, one thing I have believed would help any country to be able to support themselves and get off debt is by doing more exports and less imports. That way more money will be coming into the country. This same topic was once discussed on a forum and someone suggested that the government shouldn’t tax high earners a lot, because they are the ones that create jobs, higher tax means they will be moving their Businesses out from the country and that will lead to high unemployment rate.

[Janation]

I also asked my teacher about this in the past.

She just smirked at me and asked me if I want to have another inflation, I'm confused. This could happen but the thing is that the money circulating in the country would increase and that would lead to inflation.