PS, yes to “…So they (Federal government) are spending the money they are creating…”
But, the Federal government then sells Treasury securities to the Japanese and Chinese and Brits: those folks turn in billions of dollars and get a Treasury note/bill/bond in return.
Thus, as long as foreigners and Americans keep buying Treasuries, there is no increase in dollars (the government is, net effect, purchasing goods and services with Treasury securities/IOUs), hence, relatively benign inflation to-date.
When the foreigners and Americans quit buying those Treasuries, the printed dollars used by the government to purchase goods and services will remain in circulation, resulting in inflation.
