Deficit spending is not borrowing, it is printing money. When we borrow, we lease the use of an object for a limited period of time. Fiat currency has norentable use, it doesn't do anything. Loans don't cause inflation; inflation only results from the issuance of new money. If it's a debt, why does new borrowing cause the money supply to increase?
Government borrowing only means that more new money will need to be issued when it is monetised. If we don't expect monetisation then Treasuries would have defaulted by now anyway. When new Treasuries are issued it means nothing more than a requirement to monetise a greater quantity of debt.
Why would someone loan money to the Government when it cannot repay the debt, unless out of a knowledge that the money might be printed. Is it a loan if we only make the purchase in the expectation of debt monetisation?
It's not really a loan if you expect to be repaid with new money.
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