Most of the deficit-spending literature attributes the rise in deficit-spending to an increase in rent creation—politicians responding to interest group requests for transfers. However, as McChesney states, rent creation is not the only option available to politicians. In fact, under some circumstances politicians may not even have an incentive to create rents; rather, they may have an incentive to extract rents. As such, this paper elucidates a theory of how deficit-spending offers politicians incentives for rent extraction. Namely, this paper argues that politicians are incentivized to increase money supply in combination with deficit-spending. This is because increasing money supply distorts relative prices in a way that ultimately masks the costs of the transfers made through deficit-spending. In other words, it provides a channel for concentrated benefits and diffuse costs: money supply distorts relative price changes, providing rents to some select few while making it hard and costly for others to know that the select few are benefiting. As a result of this process, politicians can profit by extract rents—they can threaten the select few to repeal their rents unless they pay politicians a return higher. A historical example is provided to provide credence for the theory.