Right, it makes more sense in the world of a 'backed dollar'. As it is, it is a debt to repay $1 for each $1 bill. You might well ask, $1 of what? Since the go

Right, it makes more sense in the world of a 'backed dollar'. As it is, it is a debt to repay $1 for each $1 bill. You might well ask, $1 of what? Since the government doesn't produce anything, it is a strange kind of debt. $1 of tax-forgiveness is one answer. $1 of whatever our citizens produce is another answer. This 2nd answer is the reason why the demise of the dollar as the world currency (aka wealth reserve function) could lead to hyperinflation in the USA as all those foreign-held dollars come flooding back, looking for something domestic to buy. As long as the dollar is legal tender within the USA, foreign "creditors" (in the sense used in the above comments) can always get something back (however debased in value). If like Brazil and Argentina, the USA defaults and creates a new currency (it'll never happen, right?) then good luck to all the drug-dealers of the world trying to cash in their old greenbacks. <edit: phrasing!>