Shiloh: You shouldn't confuse FED with the Federal government. Those expenses you mentioned have nothing to do with FED. They are mostly borrowings by Congress that increase deficits (national debt). Treasury sells paper to get money from market. FED plays no role in that. Of course, more treasury borrowings increase demand for money causing interest rates to increase. That has an effect on increasing exchange rate of $ as foreigners will invest in $. But it is a pain for mortgage and credit card borrowers as interest rates increase. High $ also reduces US competitiveness.
