No, it doesn't. Deficit spending does not create new money. Deficit spending borrows existing money from people in the economy who already have it, and gives it out in exchange for a share of future revenues. The Fed does not participate in Treasury primary auctions and does not monetize the debt as a means of funding government operations.

Think about it this way: if money were just created to fund the deficit why would we have a debt? That's double-counting. You can invalidate your hypothesis very easily: the M2 money supply is about half the size of the debt. It's not possible to square that circle unless deficit spending was re-pledging existing money.

They influence creation of money by adjusting the short-term interest rate which influences the demand for borrowing at commercial and retail banks. It's not that direct or straight-forward though, because they only have control over the short end of the yield curve not the long end. The long end of the yield curve has interest rates defined mostly by inflation expectations. If they dropped rates to 0% overnight it probably wouldn't move the 30Y yield all that much -- it might even raise it because of the expectation lower short-end yields would raise inflation.

The Fed doesn't have nearly as much control as folks think.

The Fed directly created money during QE and they are directly destroying it during QT. There's a net add, but that's mostly because the economy is growing, which creates new demand for money as expressed by demand for debt.

The money supply staying fixed or shrinking is a non-goal anyways. It's irrelevant. What matters is inflation as measured from the change in actual prices.

Ah yeah, that's a common misconception.

Deficit spending doesn't create new money. Deficit spending borrows existing money from the population and institutions in exchange for a promise of future government revenues. The Fed does not participate in treasury primary auctions and does not monetize the debt as a means of funding government operations.

If you printed new money to pay for the government, you wouldn't have a debt. That's double-counting. Not to mention the debt is twice as large as the entire money supply so what you're suggesting isn't even physically possible. It would be inflationary to simply print new money to finance spending, which is exactly why it's not done.

[edit] Also the debt limit is a stupid concept that's likely unconstitutional. Congress authorizes spending, meaningful debate over paying for it by adjusting the debt limit likely falls afoul of the 14th amendment's public debt clause. But yeah I mean the debt limit goes up because the government spends more money than it takes in, so it needs to borrow more each year.