Research On The Government Issuing Excessive Money To Deal With The Financial Crisis In Chinese History

Based on the discussion on whether the local government debt crisis should be alleviated through the monetization of fiscal deficit,this paper then associates with how the government responded to the financial crisis in Chinese history.After that,this paper systematically combs and reflects on the practice and consequences of the government solving the government debt crisis through the means of fiscal issuance of money in Chinese history,hoping to summarize and summarize general laws and conclusions.Then we hope to enrich the research perspective of the history of Chinese economic thought.The advantages and disadvantages of monetization of fiscal deficit have been fully discussed in the academic circles.Through the research on the views of both sides,it leads us to think as follows: can the governments of all dynasties in China really solve the fiscal crisis by choosing to issue more money through fiscal monetization? What impact will fiscal over issuance of money have on the subsequent social and economic development? Similarly,why does the solution to the financial crisis by issuing money have different consequences? This paper will take these thoughts to seek the answer to history.Both Emperor Wu of the Han Dynasty and Wang Mang issued money to increase fiscal revenue,but they had different consequences.The reasons are as follows: first,the purpose of issuing money was different.A series of fiscal and monetary policies adopted by Emperor Wu of the Han Dynasty were to support the righteous war against the aggression of the Huns,while Wang Mang’s monetary policy was entirely to meet the selfish desires of his ambitious;Second,the way of issuing money is different.Emperor Wu’s monetary policy did not affect the private economy,while Wang Mang’s series of monetary system reforms seriously disturbed the normal operation of the private economy.Paper money was originally born in Sichuan during the Northern Song Dynasty.From the issuing situation of all dynasties,it has experienced the process from the complete and stable system in the early stage of issuance to the inflation caused by the over issuance of paper money by the government due to the financial crisis and the final depreciation.In this paper,the reason is attributed to the contradiction between feudal autocratic centralization and the need for good institutional guarantee for the issuance of paper money.In the face of serious financial crisis,the government often pays more attention to short-term interests and ignores the long-term impact of its actions on the economy.The natural expansion of government fiscal expenditure is easy to promote the disorderly and excessive issuance of paper money,Finally,it will lead the economy to the abyss of hyperinflation.During the war of liberation,unlike the KMT government’s crazy over issuance of gold coupons and legal notes,the border region government led by the Communist Party formulated a flexible monetary policy,decoupled the banknotes issued from the inflated legal notes in the KMT controlled area and linked to the food and other materials in the border region,maintained control over the price level in the area at all times and saved financial expenditure,Through a more reasonable credit policy to stabilize economic production and raise taxes,there was no hyperinflation under the same conditions of issuing paper money.At the same time,the good economic environment of the border region government strongly supported the front-line operations and finally won the war of liberation.By combing the financial issue of money to solve the financial crisis in China’s history,it can be seen that in the face of serious financial crisis,the government tends to over issue money,which is a low-cost way to quickly finance the government’s finance,and the attraction of over issue paper money to the government is much greater than that of over issue metal money.For its subsequent adverse impact on the economy,promising governments will also formulate strict safeguard measures for over issuance of money,such as short-term price leveling policies,policies to restrict the number of money issued,etc.,and strive to reduce its negative impact on the economy while ensuring the passage of the financial crisis.Inactive governments often only pay attention to the short-term benefits brought by over issuance of money,The continuous and indiscriminate issuance of money eventually led to spiraling inflation,which plunged the government’s credit to the people into a negative cycle,and even planted the seeds for the collapse of the regime in advance.In addition,the fundamental evaluation criterion of the consequences of the government issuing more money is whether it wins the support of the people."Water can carry a boat,but it can also overturn a boat".The excessive issuance of money will inevitably affect the actual economic operation.However,as long as the formulation of government policies is people-oriented and takes the overall interests of the people and the country as the starting point,the country’s economic development will eventually be on the right track.On the contrary,the financial issuance of money that is not popular will sooner or later make policy makers suffer.In view of the current situation,China’s non monetary approach is far from optimal in the face of the financial crisis.