There's some debate down-comments about whether this specific policy is quantitative easing, but we can go back to a broader view.
In 2019, the US government spent about $400B on debt interest payments. The overall money supply (M2) grew by $900B, about 6.2%. Constant-dollar GDP growth is ~2.3%, and inflation is ~2.9% so that's about $145B of paper monetary growth not backed by assets or general decline in purchasing power. (Sorta. Maybe. The US can implicitly share in growth not reflected in GDP, which complicates all of this immensely.) Assuming that's fair shorthand, how do we make up the gap? In 2008, the paper 'value' of a whole bunch of physical assets (homes) diminished, closing the difference at the expense of homeowners and investors (and the USG).
We could see something like that again: private equity and credit card debt look like plausible options, and student loan debt may be "nondischargeable" but that doesn't stop people from defaulting or dying indebted. The USG could theoretically fail to pay its debts in full; that would only require a Greece-style 'haircut' rather than an outright default, but it's still basically out of the question. If investors arrange to not lose the full debt, various rearrangements (bailout + taxes, diminished public services, bankrupt pensions, etc.) could make up the difference by passing the damage to non-investors. Perhaps we could see a major US bond shareholder wiped out without transfer of the debt? I'm not actually sure what happens to those bonds when the bondholders are embargoed or cease to exist in sufficiently-unstable situations. Fascinatingly, a student loan collapse could be partially covered by university bankruptcies: since the value of a degree greatly exceeds the summed value of four years of courses, students are functionally investors betting on the continued existence of their school. (As ITT Tech students found out to their detriment.)
Or, of course, we could see inflation and value growth outpace M2 growth a few times and cancel it all out without any dramatic shift. People aren't in a hurry to call this in, and offsetting it doesn't even require the US to run a surplus.
In 2019, the US government spent about $400B on debt interest payments. The overall money supply (M2) grew by $900B, about 6.2%. Constant-dollar GDP growth is ~2.3%, and inflation is ~2.9% so that's about $145B of paper monetary growth not backed by assets or general decline in purchasing power. (Sorta. Maybe. The US can implicitly share in growth not reflected in GDP, which complicates all of this immensely.) Assuming that's fair shorthand, how do we make up the gap? In 2008, the paper 'value' of a whole bunch of physical assets (homes) diminished, closing the difference at the expense of homeowners and investors (and the USG).
We could see something like that again: private equity and credit card debt look like plausible options, and student loan debt may be "nondischargeable" but that doesn't stop people from defaulting or dying indebted. The USG could theoretically fail to pay its debts in full; that would only require a Greece-style 'haircut' rather than an outright default, but it's still basically out of the question. If investors arrange to not lose the full debt, various rearrangements (bailout + taxes, diminished public services, bankrupt pensions, etc.) could make up the difference by passing the damage to non-investors. Perhaps we could see a major US bond shareholder wiped out without transfer of the debt? I'm not actually sure what happens to those bonds when the bondholders are embargoed or cease to exist in sufficiently-unstable situations. Fascinatingly, a student loan collapse could be partially covered by university bankruptcies: since the value of a degree greatly exceeds the summed value of four years of courses, students are functionally investors betting on the continued existence of their school. (As ITT Tech students found out to their detriment.)
Or, of course, we could see inflation and value growth outpace M2 growth a few times and cancel it all out without any dramatic shift. People aren't in a hurry to call this in, and offsetting it doesn't even require the US to run a surplus.