Sorry, but that is one of the most sensationalist articles I've ever read. It's bias is evidently clear from the get go. Mind if I break it down a little?
"Theoretically, one day that U.S. government could simply decide to print as many U.S. dollars as it wants and pay off all government debts. But under the current system that is not allowed. "
And with good reason. Ever hear of hyper inflation? Each new dollar in the system means every other dollar is worth less. Or as wikipedia puts it:
The main cause of hyperinflation is a massive and rapid increase in the amount of money that is not supported by a corresponding growth in the output of goods and services.
Examples of countries printing money to pay off debt:
Pre-WWII Germany (Helloooooo Hitler!)
China (before pegging their Yaun off the dollar... which is another topic all together)
And many more economies we should never emulate.
So, when the U.S. government needs to borrow more money (which happens a lot these days) it goes over to the Federal Reserve and asks them for some more green pieces of paper called Federal Reserve Notes.
And it doesn't really pull this money out of thin air. It's usually comes from the issuing of T-Bills or some other federal security. That's where the term "national debt" comes from. I can't find the numbers right now, but about 75% of the national debt is US owned, with only about a quarter of it being foreign. Essentially, we are borrowing from ourselves and paying ourselves back. This can be extremely beneficial to an economy as long as it's used to help create economic growth. Anyone can buy T-Bills and it can be an extremely safe (although low yielding) investment.
"Getting rich" off government debt is ludicrous. Returns are usually at 1 or 2 percent. People with money and know how to invest don't waste their time with these except for security. Some people even use to think of it as a savings account you could earn interest on... but regulations have changed so that even savings accounts are allowed to pay interest. But thats another matter as well.
4 – The Federal Reserve devalues our currency. Since the Federal Reserve was created in 1913, the U.S. dollar has lost 96 percent of its purchasing power. The truth is that just a two percent inflation rate will wipe out half of your purchasing power within a single generation.
Of course it does. Devaluing our currency can be beneficial in certain contexts. Want American manufactures to be able to compete with other countries? Make it cheaper for other countries to buy American goods by devaluing the dollar. This strategy seems to be working pretty well for China right now.
The Federal Reserve also controls the national money supply. They can pump trillions into the economy or pull trillions out without being accountable to anyone. This can have disastrous consequences. For example, after the U.S. stock market crash of 1929, the Federal Reserve continued to contract the money supply. Many analysts believe that this was one of the key things that precipitated the Great Depression.
The reason this recession didn't turn into a depression like many people "predicted" it would is because our economy is managed by the Fed. The Fed had hardly any power during the Great Depression, and in fact most of its current powers are the result of the Great Depression and an aversion to ever allowing anything like that to happen again.
Sorry if I seemed scatter brained or picked on random points, but I know a bit about finance and economics and when there are articles where the author has little grasp on the real situation it really bother me. Mostly because it opened with the author saying the US could print money to pay off its debt.
If you want to learn a lot more look back through the various banking acts that congress has passed over time. Each one tells a lot about the current state of the economy and why it was passed. You'll also see a pattern of increased regulation (bad times) and de-regulation (good times).