It appears that you misunderstood what I wrote. I never said anything about printing money at a pace faster than the growth of production of real goods and services: the inflation about which you are so concerned. By saying that “the Federal government is obligated to print money for its citizens to use and carry out some sort of monetary policy,” I simply mean that the government must issue some official currency and that the amount of currency in circulation must be adjusted to match demand in order to achieve general price stability.

Do you mean to say that there should be no official currency issued by our government? That we should all just barter with what we have available? Or do you mean to say that the amount of currency in circulation should never increase, no matter how many more goods and services are produced/consumed each year (resulting in steady, constant price deflation)?

The end effect of printing money is to apply the most insidious tax of all: inflation!

This printing of money does nothing to create wealth, but reduces purchasing power, and it makes its way to the market while being funneled through special interests by those who are in government, hence those on the lower end of the economic scale will experience the greatest effect of dilution of purchasing power.

I suggest you read Economics in One Lesson for a change of perspective.

It appears that you misunderstood what I wrote. I never said anything about printing money at a pace faster than the growth of production of real goods and services: the inflation about which you are so concerned. By saying that “the Federal government is obligated to print money for its citizens to use and carry out some sort of monetary policy,” I simply mean that the government must issue some official currency and that the amount of currency in circulation must be adjusted to match demand in order to achieve general price stability.

Do you mean to say that there should be no official currency issued by our government? That we should all just barter with what we have available? Or do you mean to say that the amount of currency in circulation should never increase, no matter how many more goods and services are produced/consumed each year (resulting in steady, constant price deflation)?

The end effect of printing money is to apply the most insidious tax of all: inflation!

This printing of money does nothing to create wealth, but reduces purchasing power, and it makes its way to the market while being funneled through special interests by those who are in government, hence those on the lower end of the economic scale will experience the greatest effect of dilution of purchasing power.

I suggest you read Economics in One Lesson for a change of perspective.

In that respect, if national debt gets too large relative to the economy and tax revenue, debt gets downgraded (see what recently happened in the UK).

Norway levies a relatively high tax burden on its citizens. That surely explains some of the surplus. But as Tim pointed out, that sovereign wealth fund is a non-productive asset unless it's used to give tax breaks, fund federal programs or otherwise stimulate the economy.

On the flip side, we Americans love to stand on whatever elevated platform we can find and rail against high taxes as the ultimate sin of government. But if we can't restrain spending to keep it at least reasonably in line with tax receipts, won't we eventually find ourselves in the situation where we can't pay our debts or creditors are unwilling to lend at reasonable rates? The alternative would seem to be massive tax hikes at some point in the future.

I guess the numbers are just so huge and the “due date” on that debt so far down the road, the average American can comfortably ignore it.

But the Federal government is obligated to print money for its citizens to use and carry out some sort of monetary policy. Monetary repercussions, therefore, must be taken into consideration when the Federal government sets fiscal policy. For example, if the United States paid off its debts entirely the Federal Reserve would have no way to increase the monetary base and ease upward pressure on interest rates as the economy grew. This would lead to deflation and would likely stunt economic growth.

That said, there are ways to run a Federal budget surplus without disrupting monetary policy. Instead of saving it or paying down debt (like the United States did under Clinton), it can be invested in the private sector, thereby putting the money back into circulation. This would avoid the deflation problem and potentially have a positive economic impact. This may be what Norway has done. Of course, when the economy slows and the government starts to liquidate those investments to supplement shrinking tax receipts it runs the risk of causing asset prices to fall even more, further exacerbating the economic situation .

In short, running a national government is not nearly as simple as many people seem to think.