Final answer:
To protect against the temptation to use printing money to escape unsustainable debt, governments can create an independent central bank with clear objectives focused on price stability and economic growth.
Step-by-step explanation:
To protect themselves against the temptation to use printing money as a way to escape unsustainable debt, governments can create a central bank that is insulated from the political process and has clear objectives. This ensures that the central bank can exercise independent monetary policy without succumbing to political pressure. By maintaining a focus on price stability, economic growth, and financial stability, the central bank can help prevent excessive money printing that can lead to hyperinflation and further economic instability.
For example, central banks such as the Federal Reserve in the United States and the European Central Bank have mandates to maintain price stability and low inflation. They are designed to be independent from the government so that they can make decisions based on economic indicators and the overall health of the economy, rather than short-term political considerations.
Creating highly responsive central banks that are closely controlled by the central government or seek to fulfill the wants of the people can be risky as it may lead to decisions driven by political motives rather than sound economic principles. Such approaches can undermine the credibility and effectiveness of monetary policy, potentially worsening the debt situation.
Learn more about Government measures to control money printing