How is borrowing money from the Chinese any better than just printing up money?

[Bread and Circus]

This is an honest question. I assume somehow it is more sound to borrow because that's what we do but I don't quite understand how money circulates enough to know why. Can anyone help?

This question goes to the "bailout" and how we've handled budget shortages which are only likely to dramatically deepen.

[yodoobo]

1. Its exactly the same. Cept the Chinese get some action

In order to pay back that money, we'll have to print it.

[Marsala]

2. From my limited understanding....

Borrowing money is just using money that already exists (though we'll have to pay it back with interest). But if we print up more, we increase the total supply of money and hence devalue the dollar, causing inflation or even hyperinflation.

[Bread and Circus]

3. So is there a worldwide "net sum" of money that is an enclosed figure?

[busymom]

4. It's not. Actually, it's worse. We become more deeply

connected to a country with a terrible record on human rights.

Down the drain we go.

[chupacabranation]

10. Ugh. I know.

They kill more people every year than the rest of the world 3 times over.

Furthermore, money talks w/the Chinese. Even more than is usual on the global stage. That's both a blessing, and a curse...it's a blessing when you need to borrow, but a curse when it comes to the payback...and international arms trading...

[dbmk]

5. Just printing more of your own money, devalues all of it in play.

Say I have an orange, you have an apple, and you need buy a lemon from a third guy.
We are all willing to swap our fruit for another ones fruit.
But; You owe your apple to someone else, so you have two options. Borrow from someone, or somehow get more appples.
But if you just make one more apple, me and the other guy will go "NOWAI! We want TWO apples then".
Otherwise we will end up with one apple each. You will hold the, by now, precious orange and citrus and the ability to produce more appples and decrease the value of our apples while maintaining the value of the orange and lemon.

In the old days, afaik, the value of the money should basically be = MoneyInPlay/GoldInFedBank.
Thats not the case anymore though. And thats where I should stop talking about stuff I know little about.

[uponit7771]

7. That's my understanding also, more money without GDP growth = devalued currency and inflation

[uponit7771]

6. The AFFECT is the same to inflation but worse for Americans cause we SHOULD be able to buy the bonds

...IIRC and make money on them like people did during the 70s.

[specialed]

8. If it doesn't increase the money supply then it doesn't automatially translate into inflation.

Printing = hyper inflation. Borrowing = inflation cap.

[iiibbb]

9. My understanding ... just printing it causes inflation.

[writes3000]

11. Am I the only one who thinks the Chinese have ordered this bailout?

It seems obvious to me that China could call in our debt at any time. They have a big stake in this. I'd be shocked if this hasn't happened. I just think they don't want to tell us.

[elkston]

12. Watch this video.

Money as Debt:
http://video.google.com/videosearch?q=money+as+debt&emb=0&aq=f#

It explains how money is created and circulated in our modern banking system, and the (limited) role government plays in the process.

It is not free of bias, however. It argues that our current financial system is too dependent on private banks for the creation of money and that more governmental control of the money supply is desirable.