[joshdata]

This article seems to be extremely confused about the difference between increasing the supply of dollars (printing money or other tactics of the Federal Reserve) and deficit spending (moving already-created dollars from the public, including foreign holders, to the government and then right out to the U.S. public again).

[NemoNobody]

I'm confused as to how that's different. Essentially the US can deficit spend an extraordinary amount, even if that deficit is financed, bc the US can simply print money to pay back the debt - without most of the drawbacks that normally come when you money is created out of nothing, BC the US dollar is the Global reserve currency.

[fnordpiglet]

Because it doesn’t print new money to pay it back. It could. But it doesn’t.

[JakkTrent]

Is there an example of this happening? I'm supposed to believe that we ask for money back from foreign countries that have stockpiled dollars as their reserve to finance domestic spending - instead of just printing money.

Why would we do that?

[joshdata]

We don't ask for dollars back. The government asks for a loan that pays interest and lots of people gladly want to make that loan - like probably your retirement investments. This is where the national debt comes from. If we printed money there would be no national debt.

[fnordpiglet]

Precisely. In fact a lot of reserves aren’t even dollars but are actually us treasury debt denominated in dollars. Treasury debt is treated as cash in most of the world because the treasury market is so liquid and it’s guaranteed by the 14th amendment of the constitution. no one wants to see the 14th invoked because a) it means our political system is so broken we are willing to default, b) it’s possible some conservative court would deny the clear language and take the backstop that insures the debt away. The 14th amendment though is basically supported by printing money rather than borrowing, which is the (c), as it’s diluting.