Why don't countries just print money rather than borrow?

[Fidelia]

Countries have the means to print or mint money. But they would always rather borrow. Why don't countries just print more money to buy whatever they want to buy instead of having to take loans from other countries?

 

[magnus2022]

Though, am not a economist but i believe that to print more money will induce inflation and create surplus thereby damaging the socioeconomic of the country. Borrowing from another country will not directly impact the economic of country immediately but overtime if it is not repaid.

 

[Webster]

Countries have the means to print or mint money. But they would always rather borrow. Why don't countries just print more money to buy whatever they want to buy instead of having to take loans from other countries?

Printing money does two things, (1) it devalues the currency already in existence (more money=lower value) and (2) it causes inflation to rise (which is what happened during the pandemic when the U.S. printed a few extra trillion in U.S. currency).

 

[Augusta]

Borrowing money ensures the country has enough foreign exchange reserves to pay for its imports and avoid a balance of payments crisis.

 

[King Belieal]

When a country tries to print more money more than the value it can offer, the currency would end up being worthless. The value of the currency is also in it's scarcity in circulation.

 

[aninditasen]

Countries have the means to print or mint money. But they would always rather borrow. Why don't countries just print more money to buy whatever they want to buy instead of having to take loans from other countries?

This cannot be as each country has to take permission from a common forum to mint money.

 

[eLdavis]

While this might be a quick fix, it often leads to inflation, and even a devaluation of the currency as well.

 

[King Belieal]

There is no way that haphazard printing of money won't affect the economy of a country. It always makes the currency to lose value so much. Zimbabwe tried it and they haven't been able to recover since then.

 

[kit_hung]

There is no way that haphazard printing of money won't affect the economy of a country. It always makes the currency to lose value so much. Zimbabwe tried it and they haven't been able to recover since then.

Printing money arbitrarily is a disaster for the economy because the currency loses value very quickly. For example, Zimbabwe tried that move and to this day their recovery has been very difficult. When money becomes abundant without real productivity, inflation rises and citizens are unable to afford a normal life. Prices of goods rise every day and savings become meaningless. This destroys people's trust in the currency and makes the financial system fragile. That is why printing money indiscriminately is a great danger for any nation that wants economic stability.

 

[Suba]

If a country prints money to finance expenditures and repay debt without a corresponding increase in the production of goods and services, excessive money circulation will occur, leading to hyperinflation, which will actually damage the country's economy. This is why governments prefer to borrow from other countries and international financial institutions or sell bonds to both domestic and foreign investors, with the aim of maintaining monetary stability.

 

[Augusta]

Inflation control as Printing too much money can lead to inflation, reducing the value of the currency and increasing prices.