> I don't believe the situation you outline is the case in reality. Dollars are not, in a sense, "debt" to the Fed. But they are. The origin of fiat currency i

> I don't believe the situation you outline is the case in reality. Dollars are not, in a sense, "debt" to the Fed. But they are. The origin of fiat currency is exactly that. Historically, dollars were backed by something (gold, assets) held by central banks from citizen deposits. But today, they are backed by nothing. Fiat dollars are simply loans taken by US govt and private citizens. While that does keep the economic engine running, it's all running on debt. Debt by citizen 1 creates money. Citizen 2 sells them corn to get that money. Citizen 2 takes that money and more debt to buy a tractor from citizen 1. Then time comes to repay money and one of them defaults. Central bank seizes assets of the defaulter for not returning the money they printed out of thin air in the first place. That system is great if there was some base backing so that savers are not disproportionaly affected. But todays massive boom busts take down the whole world except the 1%. I mean, why should a newborn baby pay more taxes for the debt of Citizen 1 (US govt)?