What would be the effect on the economy if the United States legalized counterfeiting? If today the United States legalized counterfeiting, what would be the effect on the economy? The counterfeit must look authentic to be legal, thus requiring some skill.
The initial effect would be great inflation, likely hyperinflation, devaluing the US dollar. 

Some counterfeiters have had extensive operations, running in the tens or hundreds of millions of dollars. Legalizing these operations would likely lead to a great increase in the number and extent of these operations. 

Having more and larger "counterfeiting" operations, or under the proposed law, simply additional printing presses, would cause the US to lose all control over its monetary policy.