Where you are wrong: bonds do not create purchasing power out of the air. They are effectively debt, no different than going to the bank and asking for a loan;

Where you are wrong: bonds do not create purchasing power out of the air. They are effectively debt, no different than going to the bank and asking for a loan; that debt, by the way, has been more than repaid by every president since the end of WWII until Ronald Reagan. So, that's not true. Where you are also wrong: it is also not true that this purchasing power is created "by creating money". That's an all too common fallacy from Economics 101. Sure, you have more money; but wages and prices increase too, so in the medium term, and disregarding major crises such as hyperinflation, et c., it all balances out. It's a common argument from proponents of the gold standard, and it's also false. Where you are wrong again: most governments of the developed world also have many, many things in which to spend money constructively. Social Security. Education. If the public budget being spent on Wars on Whatever is an specific issue of the US, not of countries that abandoned the gold standard, then it's safe to say it has nothing to do with the gold standard. Before you ask: most governments haven't had an explosion of the state budget; they've mostly spent that money in a responsible fashion. The current crisis is mostly because of private debt, not public debt (except in Greece), mainly in the housing industry.