Money is being printed depending upon your definition of money. When the treasury spends in excess of tax revenues which is essentially all the time, by law the

Money is being printed depending upon your definition of money. When the treasury spends in excess of tax revenues which is essentially all the time, by law they must issue a treasury security and "sell" it. This security gets sold to the primary dealer ( think big Wall Street firms). Treasury then gets account credited at Fed in the amount of security sale. Treasury then spends the money back into the economy. This "money" is called reserve balance ( federal funds/vertical money/high powered money). Since the Fed's job is to execute monetary policy ( i.e. price of money) by directly manipulating the federal funds rate, they often buy back that treasury bond from the primary dealer and remove the excess reserves else they lose grasp of the federal funds rate. Would be nice to get rid of this obfuscated gymnastics between Fed, Treasury, and Wall Street, and simply have direct printing of money as per congressional budgets passed by Congress. The current system causes mucho confusion and the illusion that the government is self funded. How can issuer of a fiat currency be involuntarily insolvent? edit: With direct printing, the fed funds rate would go to zero. No need for Treasury Bonds or "borrowing" per se.