Why we don't print money to end poverty

    If the government can print money, why not print as much money as possible? Then the money will be distributed to the poor. According to data from the Central Bureau of Statistics, Indonesia's poverty rate is 9.22% at the end of 2019. This means that there are about 25 million Indonesians below the poverty line, unable to meet their basic needs.

Why we don't print money to end poverty

    Have you ever thought...why doesn't the government print a lot of money?Then the money will be distributed to the underprivileged so that every Indonesian can have a decent life. What would be the consequences if Bank Indonesia continued to print and distribute banknotes to the people?

    If you've ever thought about it... watch this article until it's done. I'll tell you what happens if the state prints money and distributes it to the public. See you again, Luna. Welcome to an article that talks about money. Before answering your curiosity about why governments don't print money and distribute it to the public.

    I need to inform you first, an instance of a actual case that has came about in history, has there been a central authority dispensing cash to its people? The first tale ever came about in Hungary after the primary World War Hungary turned into one of the international locations that misplaced throughout the primary World War as a rustic that had simply misplaced the conflict whose financial system turned into paralyzed and the country's price range turned into additionally in deficit in those conditions, Hungary wanted cash to cover the dearth of a price range in addition to to transport the country's financial system wager what answer Hungary did?

    Yes, Hungary published lots of cash and the cash turned into channeled to banks, companies, in addition to to the overall public, Hungary's forex turned into the Kronen earlier than the First World War, 1 American Dollar turned into equal to five Kronen, so what came about after Hungary published lots of cash? approximately 10 years later, in 1924 to be precise, 1 US Dollar turned into equal to 70,000 Kronen.

    Can you believe it, handiest inside 10 years the Kronen trade charge towards the greenback weakened with the aid of using round 1,400,000% in order that it is simpler a good way to believe, I'll attempt to make an analogy of this weakening of the Kronen with Rupiah, if the Rupiah trade charge towards the Dollar in 2010 turned into IDR 9,000, then 10 years later, in 2020, 1 Dollar is equal to IDR 126,000,000. 

    This policy continued after World War II. After World War II, Hungary again adopted a policy of printing money, this time converting its currency to the pengo. The printed money was fed back to the company's bank and even distributed to the residents. The Hungarian government at the time literally flooded people with money for their cause so that the economy could thrive again after World War II, but what was the result?

    The catastrophe of the highest inflation rate in history has struck. In September 1945 it was 379 pengos, in January 1946 he rose to 72,000 pengos, in February it continued to rise to 450,000 pengos, and on July 22, 1946 he reached 1 trillion pengos. Imagine reaching 1 trillion pengo in a short period of time, Hungarian inflation will reach 150,000% in a day like today, Indomie will rise to 2,500 rupees a pack tomorrow, and then the price will rise to 3,750,000 rupees. In those days, workers had to negotiate their wages every day. Because the value of the money they received was being eroded by inflation every day.

    Well, that is one instance withinside the twentieth century approximately a rustic printing cash to distribute to its human beings, there also are different examples in which no much less thrilling withinside the 14th century, approximately the tale of the richest king in records there has been a king named Mansa Musa from the Empire Mali in West Africa withinside the 1300s, King Musa turned into recorded as one of the richest figures in records and had 3 big gold mines.

    In 1324, King Musa went on a pilgrimage. On the way, Musa gave gold to the negative withinside the huge towns he exceeded like Cairo, Mecca, and Medina due to the fact withinside the beyond the pilgrimage journeys should take months, King Musa persevered to distribute gold to many human beings alongside his adventure In only a quick time, there has been a whole lot of gold from Africa flowing to the Middle East till every person had gold. Did now no longer go back to the preceding change charge for approximately a decade the charge of products elevated human beings's shopping strength reduced chaotic financial situations withinside the peninsula h Middle East and elements of Africa at that time, from the case of Hungary and king Musa we will each research from records that, exact intentions do now no longer always cause exact intentions, it is right to print cash and distribute it to folks who are in want however, exact intentions on my own aren't sufficient with out right financial expertise to print as plenty cash as viable and distribute it to the general public can result in a main financial disaster.

    So after the two examples above, I'd like to get technical. Why print as much money as possible and instead disrupt the economy even more? Significant increase? Well, when people have money, their purchasing power increases and of course people tend to spend more.

    After all, what happens to the supply of goods and services when the demand for goods and services temporarily increases insanely? Although it is a hot-selling product, anyone can buy it, but the inventory of the product is limited. Eventually, traders will raise the price. This rising price phenomenon is known in economics as inflation.

    Communities have more money before Eid. Because with THR, people are better able to buy goods and services, which makes them more consumers. The phenomenon of rising inflation each year always peaks during the months of fasting leading up to Eid. The same thing happens when a government prints a large amount of money and distributes it to the public. Imagine THR. For some Masha people, inflation can be increased just to get an extra salary for the month. Especially if the government were to print as much money as possible and distribute that money to the public, the price increase would probably go away and our currency would depreciate further. The value of money is falling, and so are the prices of goods and services.

    It is amazing. Therefore, when printing money, the government and Bank of Indonesia cannot print money carelessly. Calculations and research are done. Community needs and economic growth must also be taken into account. If you're interested in the concept of inflation, we've already covered it in detail. in the previous article. If you're interested in content related to business, finance, and investing, subscribe to this article to receive the best content from us. See you in the next article. 

Location:

Berbagi :