Here’s how it happens: 1. The annual congressional budget has a massive deficit every year. Our government is currently ~30T in debt. 2. In order to make up t

Here’s how it happens: 1. The annual congressional budget has a massive deficit every year. Our government is currently ~30T in debt. 2. In order to make up the difference between tax revenue and spending, the treasury sells bonds. 3. The country’s central bank AKA federal reserve buys those bonds, crediting the treasury without any “buyer side debit”. This part is confusing and where the printing happens. The fed adds treasury bonds to its balance sheet WITHOUT actually “spending” any money. 4. The treasury receives cash on its balance sheet. TLDR: The fed expands the money supply to buy treasuries so congress can fund its expenses. The fed has about ~9T in treasuries and MBS on its balance sheet last I checked.