Spending Vs. "Borrowing" - Part 2

If you do a Yahoo search on: Hitting the debt limit: What bills would be paid?, you'll find the article from Mon, Jan 14, 2013 on Yahoo News. Again, the article itself is not relevant to this post, and now that it appears congress will uncap the debt ceiling for a few months, it may be not be relevant again unless congress decides to recap the debt ceiling some time in the future. But the article raised concerns about our nation's priorities should the debt ceiling be capped. Since there were several suggestions (such as the trillion dollar coin) being floated at the time on how to circumvent the debt ceiling, I thought that I would throw out one that I hadn't yet seen proposed, so I posted the following comment: "They can always print United States Notes. The debt will never increase." My comment soon received the following reply from someone named Alan: "yup, and the notes will become worthless. Ya think that's a good idea?" to which I responded: "Why aren't federal reserve notes worthless, Alan?" His reply: "Because they are in finite supply. Do some reading about fiat currency." The reason that I bring up this discussion is that I find it incredible that people can understand that printing United States Notes to float deficit spending is indeed inflationary, but that, for some unfathomable reason, they can't see that the fed's creation of federal reserve notes to do the same thing isn't inflationary. Now if our debt was on a much lower scale, the interest was manageable, and if any or all of the debt could be paid off without it being inflationary, then there would be a differnce between printing and borrowing. But if we aren't beyond that point now, we're very close to it. The debt service is only manageable because the interest rate is so low. If the debt gets much larger and/or we have to depend on the market in order to finance it, the problems will appear. And now the debt will be growing again. TBC