Why can’t the U.S. just “print” all the money it needs?
It just can’t print all the money it doesn’t need.
In other words, the constraints on the ability of a government that is the issuer of its own sovereign currency (like the U.S. but unlike Greece, for instance) are not monetary constraints, they are resource constraints (needs). So long as the money can be put to work in productive fashion by creating goods, creating jobs, building infrastructure, etc, the creation of new money “out of thin air” is not inflationary.
These ideas are all tenets of a system called Modern Monetary Theory (MMT).
The following is an entertaining 14-minute animated primer on Modern Monetary Theory, which challenges everything we thought we knew about economics for the last 100 years, particularly the notion that big government deficits are always bad, and that the U.S. government has to first borrow money before it can spend it.
The $28 trillion bailout of the financial sector in 2008 by creating money out of thin air should have shown us that we’re not in Kansas any longer.
Why not for instance create $1 trillion out of thin air to solve the long-term fiscal issue with Social Security? Or to fund a jubilee (forgiveness of debt) for underwater homeowners? Or a jubilee for student debtors? Or to put millions of unemployed people to work?
The following primer on MMT shows that all these things are really possible: