[quote=Eugene]
All that happens is that additional money is transferred to investors who sell existing Treasury bonds to the Fed. It’s certainly money creation, but the effect this would have on consumer demand and inflation is almost negligible.[/quote]
…which allows them to spend it on something else. (Of course they may spend it on other investments, perhaps that’s what you are getting at).
They can always cut taxes and finance the difference with newly printed money, which as Bernanke famously noted, would be akin to dropping money from helicopters.
