US Treasury and USDT exploding USD money supply

[u/Babad00k123]

We know if from Casinos. You enter, exchange money for tokens, play and once you leave, you change back to FIAT. In the meantime, the Casino doesnt do anything with your money.

To my understanding, Crypto and Tether is different and the US Goverment is going to use Tether to increase money supply. Here’s my thinking:

Treasury issues a bill (1) of 100 USD and Joe Sixpack buys it.
Treasury takes the 100 USD and sends it to Tether.
--> Tether sends 100 USDT back to Treasury
--> Tether sends 100 USD back to Treasury to buy the next 100 US Treasury bill (2)

Now Treasury has 200 USD and 100 USDT.
--> Treasury sends money from bill 2, 100 USD to Tether
--> Tether sends 100 USDT back to Treasury
--> Tether sends 100 USD back to Treasury to buy the next 100 US Treasury bill (3)

Treasury now has 300 USD and 200 USDT.
Since USDT is becoming a fully valid means of payment, US Treasury now has 500 USD to spend, only taking on 300 USD of new debt.

Am I missing something or is this really happening?

[u/zmooner]

money used to buy TB is not spent as you describe

[u/SenseiRaheem]

I have no idea what OP o-posted, I’m just here to say good morning to my crypto fam

[u/dormango]

Your understanding is much flawed