[apk919]

Originally Posted by Lotus Fury

Excellent point, that's something people don't quite understand. If we were printing money without creating the debt then we would be directly diluting the value of our currency - aka inflation. The increased money money supply may cause asset bubbles - or inflation in select markets - but not significant general inflation.

Yes, but if they're not printing money, that means they must increase taxes now to pay for the spending, or borrow money that must be paid back through increased taxes later. Either way, they're spending taxpayer's money.

BTW, when the Fed buys securities in the open market, it <b>is</b> printing money... it simply takes delivery of the securities and credits the seller's account, without debiting any government account. That <b>is</b> inflationary (since it simply increases the amount of dollars in the economy), and it has been done recently.