Surplus's effect on the money supply

[christian11 at mindspring.com]

>This seems like high-end crankery to me. Taxes and bond sales 
represent a diversion of resources (in monetary form) from the 
private to the public sector. A society facing resource constraints 
- and what society doesn't? - has to choose between SUVs and 
childcare, projection TVs and cruise missiles. A government can 
create money out of thin air, but it can't create real resources, 
which have to produced using a limited supply of capital and labor. 
This stuff just seems dreamy. 


>Doug 

So, what does high powered money mean in this context, precisely? Is it fiat money that is "literally" just printed, instead of being borrowed from the private sector?

Christian