Monetizing the debt?
In the United States, and in many other countries, the government does not have the right to issue new currency to pay its bills it must instead finance the deficit by issuing new bonds and selling them to the public to acquire the necessary money to pay its bills. However, if these bonds do not end up in the hands of the public, the only alternative is for them to be purchased by the central bank. For the bonds not to end up in the public hands the central bank must conduct an open market purchase. This action by the central bank increases the monetary base through the money creation process. This process of financing government spending is called monetizing the debt. Monetizing debt is a two step process where (1) the government issues debt to finance its spending, and (2) the central bank purchases the debt from the public and the public is left with high powered money. Said another way, this is the printing of money to buy your own national debt. In other words, The Federal Reserve
