Another Black Day for America

Printing more money doesn't improve economic output in any way. It merely causes inflation.

Suppose an economy produces £10million worth of goods. e.g. 1 million books at £10 each.

If the government doubled the money supply, we would still have 1 million books but people have more money. Demand for books would rise and firms would push up prices.

The most likely scenario is that if money supply was doubled. we would have 1 million books sold at £20. The economy is now worth £20million rather than £10million. But, the number of goods is exactly the same.

We can say that the increase in GDP is a money illusion. -- True you have more money, but if everything is more expensive, you are not any better off.

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[MrThetruthsucks]

Good thing Bush didn't right his own speaches .... He might of slipped up and told the truth.