Jakarta –
One of the rights of the state is to print money. The state is the only institution that has the right to print money, this will be done by the central bank in each country, as quoted in the book entitled ‘State Finance’ by Pandapotan Ritonga, SE, M.Sc.
An example of an institution that has the right to print money in Indonesia is Bank Indonesia (BI), through the General Money Printing Society of the Republic of Indonesia (Perum Peruri). Printing of money is one of the sources of state funding.
Detikers, have you ever wondered why the country doesn’t print as much money as possible so that there are no more poor people? The answer is that the state cannot simply print as much money as possible.
What happens if too much money is printed? Check out the following answers:
The value of the money will go down
When the government prints large quantities, the value of the money itself will decrease, as quoted in the book “Introduction to the Economy” by Roeskani Sinaga, et al.
The amount of money in circulation, which is not followed by the increasing number of goods on the market, will make the price of these goods expensive. Therefore, these items will be rare to find. This will make the value of the money that has been printed very much, in fact it decreases and even becomes worthless (meaningless).
It causes inflation
The amount of money circulating in a country will lead to inflation. The definition of inflation is an increase in the price of goods or services, which decreases the purchasing power of money.
If the government prints too much money, the price of the product will rise faster. This price increase occurs in most goods and services, either continuously or over a certain period of time. As with money, the circulation of the quantity of money and goods in circulation must be balanced.
National debt appears
How much money is printed will take into account the amount of money circulating in the community. Printed currency is not supported by commodities, so the increase in government activity does not increase. Because the government has nothing to pay the debt.
Likewise with money printing, money printing shouldn’t just be for the purpose of repaying government debt.
This was the answer to why the state didn’t print as much money as possible. Instead of being free from poverty, large and uncontrollable money printing has actually increased the national debt, leading to inflation.
(fdl / fdl)
