The ability to print money is reserved for the federal government. The government lowers the value of money and raises the inflation tax by printing money to pay its debts.
According to the Constitution, only the federal government has the authority to print money. This guarantees that there is a stable medium of exchange in every state, enabling unhindered trade in goods and services between them.
The value of the currency falls when the government produces money to pay off its debt because there is a greater supply of money than there is demand for it. As a result, the currency will only be able to purchase a smaller quantity than it could previously, producing a form of inflation tax because individuals will have to pay more to buy goods and services.
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