Reply #8: Not EXACTLY "thin air"

[deficitjobs]

The budget is accounted for - it's not exactly as if the money was invented from nowhere. As I understand it (and please correct this if it's wrong,) the treasury sells bonds to raise funds which are then allocated for spending. If the treasury ever fails to sell enough bonds to meet the needs of the budget, then guess what - there's no more money to spend. The national debt is largely the obligation to pay back bonds (+ interest) that the treasury has sold. It's a little more complex still; the federal reserve can (and does) buy treasury bonds. So, if a lot of cash needs to be raised quickly, the fed can buy from the treasury, and make that cash available. Further, the treasury can also borrow from other government departments, such as the social security trust fund. All of which leads to the same result: the treasury owes somebody money at some point, for money that is spent today. The gamble of the stimulus is that the economy will pick up enough with a sharp enough jolt that tax revenues will increase in future and provide the money needed to pay back the loans which were obtained today.