Ironically, the best solution would be to simply print money to pay for what they need, especially paying off debt as it comes due. The problem is borrowing the money from the banks to create currency. That creates an inflation acceleration that is terribly destructive. I’d prefer they didn’t run at a deficit, but if they’re going to do it straight printing money is the best option.
Isn’t a key issue with all of this, that the vast majority of the “money supply”, is simply debits and credits in accounting ledgers?
For example, I understand banks have only a small amount of actual currency and coins on hand at any given time. But the bank has “assets”, which are loans made by the bank, which are to be repaid in the future.
When we all get paid on payday, I don’t get actual currency. I see that the bank credits my account based on an electronic transfer from my employer’s account.