Limitations Of The Economic Economy Essay

1071 Words May 12th, 2016 null Page
Limitations typically seem horrendous to people, especially in an economic system. However, the economic fiat currency in the government right now currently does not totally restrict the government 's ability to print money at will. This causes higher inflation rates and rising consumer prices. The United States’ trade deficit continues to increase and the government 's ability to increase the national debt is still implied. The money being used in the United States is constantly losing its’ value this way. The fiat currency system can be deemed good because there is no commodity backing up the worth of gold either. By reapplying the gold standard in the United States again, these problems could be solved or brought under control rather than the almost unpredictable future of the economy. Not restricting the government 's’ ability to print money at will is called a fiat currency. This is currently the type of currency the United States of America is using. The fiat currency is based off of confidence in the money being printed out and is not backed by any physical commodity such as gold or silver, copper, which was used by the Romans for a short time, or iron used by China for a brief time (Daily Reckoning 1). Richard Nixon completely cut the ties between gold and currency in 1973 (Rapid Trends 1). However, gold has not been backing up the United States’ money since 1971 (Griffin 93). The government can declare any type of money legal tender (Encyclopedia 1). By using the…

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