Why Unchecked Government Spending Will Cause Hyperinflation Which Could Bankrupt the Country

The Government is the tool that our nation uses to pull together the resources of our society to do what we decide is right with those resources. The government does this by raising and spending funds sometimes by taking loans and going into debt and other times by taxes. Unfortunately, our leaders and a lot of the people who vote them into power prefer to take out more and more loans and print money to pay for those loans instead of doing the sane thing by not funding certain services or entailments or raising taxes or both to pay off our debts first and then fund those programs if the people so want them. If theses reckless spending habits keep up, I fear this it will cause the county to default on its debts causing a crisis where the dollar will hyperinflate and the state will not be able to fund anything. That would in all likely hood plunge our society into a state of chaos that we may never recover from. We as a people must solve and understand this problem before we all suffer a society without law and order. We can solve this problem by telling our leaders to cut spending and raise taxes and interest rates so that we can get hold of this before it becomes too late. 

The first step in solving any problem is to know how said problem came about in the first place. Well to do that we must go back to President FDR and the great depression. In the 1930s the United States was in the middle of one of greatest recessions in world history. FDR hoped by expanding the role and ranch of the federal government it would solve but by doing so he made programs that just poured money away and killed private and true wealth growth but since WW2 happened and the US went into more debt and printed money but since we won the war and became the sole remaining economic powerhouse that could be somewhat trusted. The world was forced Into making international transaction in us dollars causing the dollar value to go up with inflation and we suffered very little consequences for this spending. Making it normal for this to happen and lead to the government to only increase in power and cost. And ever since those days we have be expanding like a balloon and will have to pop one day when the world decides to no longer trade in us dollars.

You might ask what is our government spending all that money on that it needs to take on massive loans and then print money to pay for those loans off for? shouldn’t our taxes be enough? Well for the year of 2020 the US spent 6.6 trillion dollars and took in 3.4 trillion dollars. Out of that spending that “1.1 trillion dollars was on Social Security,769 billion on Medicare,458 billion on Medicaid ,526 billion on the Paycheck Protection Program and 473 billion on Unemployment Compensation, Recovery Rebates, 345 dollars on Net Interest, 714 billion on Defense,914 billion on Nondefense and 988 billion on other” (Office, 2021). Now as you can see lot of this spending is not on things like roads, trains, and other forms of investments it is on entitlements that requires massive bureaucracy to run them which I feel that Thomas Sowell best sums up my thoughts on the matter “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it (Sowell, 1980).”These services while good we cannot afford them we definitely cant if we lose the world reserve currency Title.  

I have mentioned the world reserve currency a few times in this essay, and I have failed to define it yet so I will now. The world reserve currency is the currency that is seen as having value across the world and for a currency to have this Title it needs to fit a few criteria first. 1.The country must be seen as trustworthy and not corrupt. The United States far outdoes its main competitions like China and Russia since these counties are very secretive and aggressive towards their neighbors.2. The country must have a big enough economy for it be stable and have a lot of wealth tied to it. The United States is the world biggest economy, but China has been gaining on the US for the past twenty years and is on track to past The US soon.  3. It most not have a lot of money printing and order backed up by something has keeps it value to have a consent exchange rate. The US dollar used to be backed by gold that us held in its treasury. This Gave the dollar value across borders because it could be traded for gold and capped how much money could be printed by the actual amount of wealth that was in the county. which has always had value and uses. Tragically in “1933 the us abandoned the gold stranded and in 1971 completely broke up with gold” (Why did the U.S. abandon the gold standard?, 2012). After this the Us money printing exploded and caused the stagflation of the 1970s but since everyone was trading in us dollars the demand kept up with the printing. This stopped the Us from turning in Germany and have hyperinflation. Hyperinflation could happen in the us if we lose the world reserve currency and do not have or spending and printing under control.

Hyperinflation was incredibly damaging to Germany economy in the 1920s making it so that no could uses its money to buy goods and services causing starvation and lawlessness. Germany ended up this way by trying to print off money thinking that it could uses that new money to pay off the debts it had from the first world war. While on the surface this made sense if you need more why not just make more? But money is not wealth itself but a promise of good and services which need to have been created in order for that money to have value but since Germany created the money but had no growth in either jobs or goods to match its currency quickly lost its value since it soon became just a piece of paper with nothing backing it up. This is important for America because we need to understand that printing money to pay for things we cannot afford will catch up to us and we have to honor our word and if we cant do that no one will buy stuff with dollar and our country will collapse given the fact that we will have no way to fund our government and most the people that we entrust to keep us safe and secure would leave their jobs and it soon become every man for himself.

The majority of Fire, Ems, Cops, Social Workers, Military, etc... While noble and having the best of desires for their country and towns would not stay at their jobs if they cannot provide for their loved ones and who could blame them. If we had this mass quacking during a crisis such as hyperinflation this would endanger everyone who lives here by enabling the worst in our society to causes pain and disasters going unprevented or having no response. This would stop society from making any progress on problems until someone who have put a new system in place by force and that would cause tons of death and suffering and should be prevent at any cost. even if that means cutting funding so certain things that way, we wouldn’t have to print more money and risk it is running out of control.

If my fellow America follow my recommendations, I believe that Hyperinflation can be prevented, and we will have stability that would benefit every American even if that means we will have struggle to make ends meet for a while. I hope that my essay changed people mind and bought light to the issue of time.

Works Cited

“The Federal Budget in Fiscal Year 2020: An Infographic.” Congressional Budget Office, 30 Apr. 2021, https://www.cbo.gov/publication/57170. 

Sowell, Thomas. Knowledge and Decisions. Basic Books, 1980. 

“Why Did the U.S. Abandon the Gold Standard?” Mental Floss, 5 Oct. 2012, https://www.mentalfloss.com/article/12715/why-did-us-abandon-gold-standard.