U.S. Politics: #7 Dollars, Inflation, And Deflation

Hi, and welcome back. Today, we’ll be talking about what makes a dollar so valuable, or in other words, what makes a dollar, a dollar.

Dollar bills are, of course, printed by the government, but what makes it so valuable, and not like other pieces of paper? For starters, it isn’t managed by the Executive, Legislative, or the Judicial branches, rather, it’s managed by “The Fed”, which isn’t under the power of any branch.

The Fed is in charge of deciding how much money to print, but they can't just print infinite amounts, either, since that would cause “inflation”. Think about it, if there are like infinite amounts of dollars, then they wouldn't be worth anything anymore, since the product you're trying to buy can't keep up with the increasing rate of your money, so the infinite amount of money could only buy the same amount of goods as when you have a normal amount of money. That is called “inflation”, and vice versa, if the money is fewer than what you want to buy, it would become rarer and rarer, which is called “deflation”, so you wouldn't want to spend it, meaning businesses will fail, and more unemployment.

So all in all, I think it would be better if we left dollars alone.