Art Rolnick Quote - Liberty Quotes Blog

"We make money the old fashioned way. We print it."

by:	Art Rolnick former Chief Economist, Minneapolis Federal Reserve Bank
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Categories:	Banking, Economics, Fed, Money, IRS, Taxation
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Reader comments about this quote:

5 stars for accuracy, thumbs down for what this means to freedom, liberty, happiness, and prosperity. -- Mike, Norwalk 1
If this is true why don't they print 10 trillion and get us out of debt. And print another 3 trillion each year to pay the current budget and stop taxing us with income and social security taxes. Obviously this guy is a comedian. Money is a measure of wealth. One persons expense is another persons income. Money just measures the transfer of value from labor to product etcetera. Just printing money devalues all of these transactions and it don't happen. There is only about 500 billion dollars extant in the country and from it a 15 or 20 trillion dollar economey is run. -- Waffler, Smith, Arkansas 1
Heck,Waffler, wake up, THEY don't want us out of debt. -- jim k, austin, tx 1
cool. Its humorus you dopes. -- warren, olathe 1
Such honesty is rarely heard from the Fed. Waffler, are you trying to tell me that you still don't understand how it works? Do you really believe this guy is joking? "Why doesn't the Fed print up 10 trillion dollars and get us out of debt?" Like Jim said, 'THEY' don't want us out of debt. Remember, the Fed is not in debt (as they simply print up 'money' and buy interest-bearing government T-Bills which the government must pay interest on), and it is not federal, it is private. But you are partially right, Waffler, the government does issue more T-Bills (which are just promises-to-pay-with-interest at a future date) to pay off some debts. It is like having 2 credit card accounts with unlimited credit lines -- you just use one to pay the other, and each account gets deeper and deeper into debt -- the interest of which goes straight to the Fed -- for 'money' they simply printed up. The reason the US dollar has been crashing for 2 years now is because the printing presses are in high gear, issuing 'money' faster than our productivity -- thus our currency becomes worth less -- i.e. inflation. One day Waffler I do hope that you actually look into all this instead of just brushing these arguments off. I would think that you would agree that if there is a magical printing press that can pay for all our social services and defense, then the People ought to be the owners of it and reap the massive profits for our social safety net, not borrowing from these scamsters at interest until our entire country is bankrupted with an unpayable debt. -- E Archer, NYC 1
I should add, of course, that the Fed doesn't actually need to physically print money -- the money is created with bank checks and electronic journal entries. Perhaps you are missing the sleight of hand here: every 'dollar' in your bank account and in your pocket came into existence by someone borrowing it. Every 'US dollar' in circulation today is indeed a promissory note (an IOU) bearing interest. Every single dollar has been borrowed and someone somewhere is paying interest on it right now. If we were to pay back every loan, there would indeed be NO MORE MONEY and we would still owe more! When our money was backed by gold and silver, the gold and silver were stored in a bank and we were issued certificates that certified that the gold was in the bank and could be withdrawn with this certificate. This allowed people to trade without carrying around heavy specie. New 'money' could not simply be printed up -- that would be counterfeiting. Today our money system is completely turned inside-out. The Fed took all of the Americans' gold in 1934 by FDR's presidential decree (!!) and in exchange we got Federal Reserve Notes that were not backed by anything. And each Federal Reserve Note issued since has been 'borrowed' -- a term I use loosely since the money did not exist until it was 'loaned' into circulation. And when that debt is paid back, that 'money' disappears back into the void from which it came. So today, our government is completely beholden to the Fed -- as are each of us who use their Monopoly money. Whoever holds the purse strings is the boss -- a People in perpetual debt are not free, and most of the legislation today is about getting access to that magic printing press -- just know that it is at the expense of the People and their progeny. This is totalitarianism -- and the goal is the same as that of every other power hungry monarch -- to rule the world. -- E Archer, NYC 1
Printing money was fine when it was backed by the gold that it represented.NOT ANYMORE!!!! The US Dollar is a Federal Reserve Note of debt. -- Me Again, Your Town,USA 1
"Why doesn't the Fed print up 10 trillion dollars and get us out of debt?" Are you serious?! You ever heard of inflation? Do you know how inflation works? The Fed (central bank that prints money) arbitrarily sets an interest rate at which to lend to other banks; this is easy for the Fed to do, because it just prints off whatever it needs. The Fed, of course, uses various economic equations and formulas to determine what the prime interest rate would be for the given situation, but this is irrelevant. The banks who have received a low interest loan from the Fed turns around and offers a slightly higher interest rate to us, the people (this is one way banks make a whole lot of money). When the Federal interest rate is extremely low (less than 3% like it is now), the banks are capable of borrowing even MORE money with less risk. At this point we are to check our Econ 100 junior high school textbooks to realize a principle called "Supply and Demand". Two things give products their value: (1) their usefulness/need, and (2) the quantity of that useful/needful product. If the useful/needful product is rare, the price will be high. If the useful/needful product is easily found, then its price will drop. Money, because of how our current economy is structured, is perhaps the most useful/needful product we have in America (as opposed to a bartering system). As said, if you increase the amount of money in the system, the value will drop. If you decrease the amount of currency in the system, the value will go up. How does the Fed control how much hard currency is out in the economy? Through the interest rate. Going back to the question "Why doesn't he Fed print up 10 trillion dollars and get us out of debt?" the answer is quite simple, especially if you understand world economics and WHO actually has invested in our dollar. China, for instance, is holding on to $500-$700 billion. This isn't uncommon -- nearly every country in the world has invested in US through our currency; however, as the Fed drops the interest rate and the market is flooded with more currency, what happens to the value of our dollar? It drops! Our whole present "recession" is based on margins of $1trillion -- What on earth do you think would happen if the Fed flooded the market with $10 trillion?!?! With how much the world market has become dependant on our dollar, the dollar would be worth hundredths of a cent and the world economy would collapse. The Fed DOES print "funny money" (money with no backing), and prints it at will! This is not a hidden conspiracy; this is what you learn in Economics 100 in HIGH SCHOOL!! Paper money was not new to the founding fathers, why don't you look up what they said about a central bank, paper money, and the effects and consequences that these will have on the people! -- Logan, Memphis, TN 1
Waffler, I hope you're playing an idiot devil's advocate, you definitely made me smile. To answer your question: The Federal Reserve is a private entity, not a government, or We The People's entity. If the Fed printed and issued 10 trillion, it would not get us out of debt but rather, place the recipient(s) thereof 10 trillion, with additional agreed upon interest in debt. And, printing another 3 trillion each year to pay the current budget would only extend the time needed to pay the original budget and, add 3 trillion with additional interest debt to the original budget. No government can exist without taxes. The question arises: 'how or what to tax without enslaving the sovereign or lessoning freedom and liberty. The written Constitution, supported by fiscal law and moral principle, was an excellent foundation. Another question that scares the HELL out of me is: Why would a bank with authority to create fiat as a wealth measurement, need military regulation and other implements of war to enforce its own prejudice? -- Mike, Norwalk 1
I'm came in late and you have said it all - well done! Have a great weekend, Robert -- RobertSRQ
I am glad I got y'all's attention. Of course I was being facetious about printing money and getting the US Gov't out of debt. And of course the Fed guy was kidding about creating wealth by printing money. To pay off the Federal Debt and to balance the annual budget we must give up real wealth ourselves. Do with less consumer products etcetera and transfer the saved wealth to the US Government. Economics is the allocation of scarce resources, the guns versus butter argument. We need to decide agaan about whether to have more and continued tax cuts for the rich or to pay off the debt. AS YOU GUYS SEEM TO AGREE CREATING GREENBACKS IS NOT THE ANSWER. So glad to find y'all are awake. It is refreshing. -- Waffler, Smith, Arkansas 1
-- Anonymous
It is all FRDERAL RESERVE NOTES, (IOU's) and no more real value than the paper in the bathroom. It is all a dog and pony show. -- Hooch.Brown, Corona, California 1
Hey Mike, NOT a penny that is paid in INCOME TAX goes to support any goverment. ALL the so-called money that is paid goes to the Department of Treasury, which is part of the Federal Reserve. Again it is all one big JOKE, HAHA -- Hooch.Brown, Corona, California 1
Umm... I think Germany in the early 1900's already tried printing Million dollar bills... and you know how that worked out. -- Nokwisa, Garland 1

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