Question

Why can't a country's central bank (like Argentina, Greece, Venezuela, or the US) just simply print and mint more money to pay off it's outstanding foreign debt?

Answer 1

Because the printed money is the debt in its own way. The government prints money and purchases public sector goods and services, and the money is then exchanged as a means of payment for other goods and services in the private sector. The value added to the economy is those goods and services. That's not the money. Some of that money is funnelled back to the state in the form of taxes in order to avoid inflation, so it doesn't have to print so much that it's worthless. The money "recycles" in the same way as it does in the private sector when it then uses this returned money on public goods and services.

But only the state can make more money, because the value of the money is the state that promises it. Then you agree on exchange rates for money from other countries to facilitate international trade with money (instead of merely goods and services for other goods and services). States who wanted to control the economy should prohibit the interchangeability of their main domestic currency and use a different and much more controlled currency for international trade instead. If the government decided to pay off all its "debt," it would simply collect all the printed money back, and use whatever foreign currencies it had to buy back papers on the state duty.

Back in the old days when most states were much more powerful and more economically regulated, money was bound to precious metals such as silver and gold. Nevertheless, this is no longer feasible these days when such metals are exchanged in a free market and the size of the economy has expanded far beyond the amount envisaged at the time.