It's not just bankrupt governments that print money, banks do it all the time. Needless to say, they jealously protect their right to do this almost as much as they condemn anyone else for even trying it. In fact, that's what they do for a living. Banks lend out more money than they receive from depositors. This is cash that's been printed. Well, the check they give you, or the one you write on the non-existent money in your account, is printed.

Oh sure, you can say that this phantom cash serves a purpose because it stimulates the creation of real wealth, productive capacity. Businesses buy machinery, upgrade facilities, purchase material and pay salaries, so they create capital with this non-existent money that wasn't there before, and could never have arisen without the loan. That pseudomoney creates real wealth.

But what about money that is borrowed to buy consumer products? This is stuff that doesn't really make wealth, it just APPEARS to because people have to make the trinkets you paid for with your credit card. That is effort that is never translated into additional goods and services. But that new TV you just got doesn't make a product or provide a service, it creates nothing (unlike the lawnmower you bought for your gardening business, or the cheeseburger you had before you went to work). Nobody is willing to pay you for you watching your TV like someone is willing to pay to have their lawn mowed. I'm not saying that all economic activity must result in actual wealth creation resources, we're all entitled to watch a little TV, and normally we generate enough surplus value to afford it. But sooner or later you wind up buying stuff you don't need at prices you can't afford with money you (or anyone else) hasn't got. And this is somehow supposed to be good for the economy?

Then there's the little matter of interest. You repay your loan, plus interest; where does that come from? The lawnmower may have created wealth, but your TV doesn't. That interest had to come from money that might have been used to create or replenish wealth; like pay your bills or send your kids to school, order some more cheeseburgers.

Money is like energy. It is the ability to do work. It must constantly be injected into the system for it to continue operating and growing. It cannot be created, it can only be harvested, from either the value of the earth's resources (fossil fuel) or the result of human labor (sunlight).
And money has no intrinsic value, it is only an accounting tool we use to keep track of wealth. When you borrow money to upgrade your business, buy material, or pay a worker's salary you are borrowing on the wealth that business and worker will generate in the future.

This system sounds totally absurd and unworkable, but fortunately, human beings can be incredibly productive, especially when allowed access to tools that allow them to magnify their ability to work and think. So we can always create much more wealth than we consume. That is, UNTIL money becomes a commodity in itself, when it is traded and used for collateral, when IOUs go on the market as if they had a value all their own. That is what banks and the financial system do.

Now a little bit of this is good, we need credit because we can often create more wealth than we required to assemble the means of creating that wealth; we can borrow from our future wealth and use it to help us create that wealth now. There is nothing wrong with this, but we must never forget that wealth is not created by money, it's created by that kilo of gray jelly residing in our collective skulls. And we are capable of creating more wealth than we can consume, and from there comes growth and progress, prosperity, luxury and security.

Interest is the overhead, the friction if you like, that is consumed during this process. It allows the lender to share in the prosperity created by the borrower by helping to make it happen. That's a good thing, but when that interest becomes an end in itself, a commodity, when it is bought and sold and used as collateral to generate more interest, that buying power represented by that interest no longer has any referent in the real world of value. It is fake money. And it crowds out real money because printing it is so much easier than earning it. It has been printed just as if we had set up a press and started our own mint.

The financial system should serve as a tool for business to allow us access to uncreated wealth so it can be used today. It's a bootstrap process similar to a time machine. But when the financial system confuses the tool for the artifact the tool is supposed to produce, it starts to grow on promises, not on work. It becomes decadent and dysfunctional. It depends on what we hope will be there tomorrow, not on what will actually be there.

The whole system becomes based on the economy being bigger tomorrow than it is today because it's now all one big Ponzi scheme. This is why economic growth is so important: without it sooner or later the money engine runs out of energy. Cranking up real printing presses is only a temporary solution unless it actually it can somehow put people to work creating wealth-creating products.

So what will economists and bankers say about this concept I've outlined here? "ER, you don't know what you're talking about." Well, look around Wall Street and see if they did any better when they were in charge.