A common misconception that certain factions of the American populace seem determined to spread is that the United States must, like you and I, balance its budget. When this could not be farther from the truth, as the Federal Government as a sovereign power with complete control over its currency. The ability to create money by fiat is quite possibly one of the greatest powers a government can have. As the steward of its own currency a government the government can never default on its debt unless it chooses to.
Modern Money Theory states that a government should increase spending to reach full employment. This works because the very act of government spending creates money.The next argument one will hear in opposition to this is that it will create inflation, and if the government keeps spending after full employmnet has been reached it will, but if full employmnet has not been reached then inflation will not happen. And even if inflation should happen in the short run it will correct once businesses begin to run closer to their productive capacities, as they will once demand has been demonstrated.
Goverment spending, possibly as an employer of last resort, is almost alwyas better then cutting taxes as it will directly stimulate demand for more goods and services, whereas cutting taxes could have no impact at all as those that benefit the most from tax cuts, the rich, will almost certainly not employ more workers, indeed why should they when they can keep their labor force the same and instead reap more profits.
So if you ever hear anyone state that the goverment is going to run out of money remind them of this one simple fact: the government controls the printing presses and thus can always print more money.
