That dilutes their own dollars, esp. since they can't make more! And so on. There are rules for the money supply. Also, Mosler seems not to get the difference between "can in technical principle" and "may do so based on rules." As for no big deal, leave our kids in debt since we can all buy the stuff that's made. -- Heh, REM that money allocates *relative* buying power. And if borrowing is legitimate, the lenders want a cut back (and that is not diluted too much by increase in money supply.) So what happens is redistribution of wealth, as money must be scrounged up to pay lenders (or, we "make more" in Mosler's glib way which dilutes the buying power and will be soon disdained by lenders as a trick.) Treasury banks at the Fed just like everyone else. If you buy a Treasury, you book it as asset, Treasury holds it at liability. In order to repay bonds at maturity, yes Treasury account must have money in it (as per current rules -- if it is allowed to run overdraft like banks then this is not neccessary and it would be trivial change). Of course, when bonds were bought Treasury account was credited by that amount, so repaying bonds is just reversing operation. But Treasury cannot sell bond unless Govt first run deficit. There is no other way private sector can have money to buy them. You can see why it is better to just do away with