Back when the financial system relied entirely on physical assets like metals, the government needed to have those metals available to produce money Today the

Back when the financial system relied entirely on physical assets like metals, the government needed to have those metals available to produce money Today the overwhelming majority of money is digital and producing more doesn't require the government to have enough metal to mint coins. They simply need to change numbers in a spreadsheet The "borrowing" you're referring to is not a transfer of physical assets. The money doesn't "go" anywhere, because they only exist as abstract representations in a spreadsheet The government of the UK has chosen to only spend an amount equal to the one removed from selling bonds, but there's is literally nothing preventing them from doing it without that step If the government want to spend more money than they get in through bonds and taxes, they can just do it If they wanted to remove money from circulation they would simply issue bonds and not have an equivalent spending at the same time It's two independent operations, that seems connected if you have a mental model that a government runs a household budget That the UK base economic decisions on that assumption does not change the underlying mechanics of the transactions or invalidate MTT as a model for describing economical systems