In the present environment, at least the in the US and most of Europe, it is conceivable that counterfeiting money has positive externalities. There is a very high unemployment rate, and low capacity utilization across most sectors of the economy. There is a fairly broad school of economists who believe that this is the result of a shortage of aggregate demand brought on by poor macroeconomic management due to an irrational fear of inflation—that the central bank can and should do more than it is doing to stimulate the economy, and failing that, central goverments not facing high or rising borrowing costs should be willing to run large short-term deficits. If this bunch of economists is correct, then these policies would be good for the global economy. Since counterfeiting money is essentially equivalent to monetary stimulus, it also would have positive externality. It would be much more likely to put some resources back to work and have little or no effect on the value of assets denominated in that currency.
If all economic actors are perfectly rational, and none suffer from money illusion, hyperbolic discounting, or other effects, then you would be right in all times, not just in normal times of close to optimal fed policy and near full labor and capital usage. That would also mean that the economists to which I refer would be wrong about the current state of events.
I agree, though, that buying junk you do not want would destroy most of any utility gained by counterfeiting. It would be far better to buy things you do want, or failing that, to simply give the money away.
In the present environment, at least the in the US and most of Europe, it is conceivable that counterfeiting money has positive externalities. There is a very high unemployment rate, and low capacity utilization across most sectors of the economy. There is a fairly broad school of economists who believe that this is the result of a shortage of aggregate demand brought on by poor macroeconomic management due to an irrational fear of inflation—that the central bank can and should do more than it is doing to stimulate the economy, and failing that, central goverments not facing high or rising borrowing costs should be willing to run large short-term deficits. If this bunch of economists is correct, then these policies would be good for the global economy. Since counterfeiting money is essentially equivalent to monetary stimulus, it also would have positive externality. It would be much more likely to put some resources back to work and have little or no effect on the value of assets denominated in that currency.
If all economic actors are perfectly rational, and none suffer from money illusion, hyperbolic discounting, or other effects, then you would be right in all times, not just in normal times of close to optimal fed policy and near full labor and capital usage. That would also mean that the economists to which I refer would be wrong about the current state of events.
I agree, though, that buying junk you do not want would destroy most of any utility gained by counterfeiting. It would be far better to buy things you do want, or failing that, to simply give the money away.