Why doesn the Government just make new money and put the recession to rest?
Money is just a promisory note "saying" it is worth "X" and thats alright if "X" equates with an actual thing. For example a check is accepted as being worth the dollar amount written on it because we can exchange it for that amount of actual money (limited by the amount of money in the account it was drawn on) but if for some mysterious reason the bank continued to cash checks disregarding the normal limits, ask yourself what would happen.
The route problem with the recession is that bankers got greedy. Many banks lent out money that was risky by most standards and would not be guaranteed to be paid back. The main culprit being mortgage and house loans/payments. So, since the money circulation has dried up, there is less opportunities for business expansion, people begin to spend less, business get closed down, foreclosures etc etc. It’s not wholly blamed on the lack of credit, more that people have been kicked in touch slightly with the phrase “living within your means”. Lots of countries have taken action to begin printing money. But this just causing inflation. Putting money into the economy that was not earnt, just increases prices and makes money woes worse. In the US for example, nothing can compare to Obama saying to cut taxes for people earning under $250k. But, in reality, after the billions or even trillions the Federal Reserve has been secretly pumping into the economy, that tax cut will look pitiful when you
