[Starwind]

The bank spent the money when it loaned it to you, and you are spending it when you pay it back, with interest, which cannot qualify as anything other than spending.

You have some basic misunderstandings of the definitions of loan, borrow, spend, etc.

You might start with Campbell R. Harvey's Hypertextual Finance Glossary

The velocity of money is the frequency the same dollar is spent.

Yes. I said as much - that when the same 'money supply' is spent velocity increases (not when debt is repaid) but when money (borrowed or saved) is spent, and I gave a non-loan cash example where the velocity increases but not the multiple.

The multiplier-effect deals with money creation, which may or may not have a bearing on its velocity.

Yes, I said they were related but not the same, and I said the multiplier effect happens when the same 'money supply' is loaned/borrowed (not spent, but loaned & borrowed - spending does not multiply money - only borrowing via a fractional reserve banking system multiplies the money supply).

[1rudeboy]

Seeing that you and I are hung-up on the definition of spend, I'll include an edited version below, since your dictionary-link has no listing:

spend [O.E. spendan borrowed < L. expendo or dispendo, to expend, to dispense.] To expend or pay out, as funds or wealth. --v.i. To make disbursements or expenditures.
--Webster's

Note that the word is tied to the notions of "paying out" and "disbursement," both characteristics of a loan. Also please note that this link goes clear back to the word's Latin/Old English roots, including the strict definitions "dispense" and "borrowed."

In sum, and using the common definition, a bank "spends" money when it loans it to you, just as you "spend" it when you pay it back with interest.