Reserve System comprising FRS accounts of the Treasury, foreign governments, and commercial banks, in terms of the aggregates. The reserves that Treasury introduces get saved as tsy's issued in offset. This also increases the net financial assets added to nongovernment through the interest paid on the tsy's. What should be the subject of discussion instead of the national "debt" (really savings) and rising deficits (creation of net financial assets that increase effective demand) is the unsustainable level of private indebtedness that financial austerity will only exacerbate, possibly provoking a debt deflation and resulting depression. People are concerned about the wrong thing --   an ideologically manufactured pseudo-problem instead of the real financial problem facing us regarding private debt, which portends dire economic consequences if not dealt with properly. I wasn't so concerned about what happened to the printed money. I was more wondering what happened to the funds. It's just hard to wrap my mind around the concept that my 2 grand gets destroyed (electronically or otherwise) like so many kilos of siezed drugs. I will admit to buying in to the "reserve banking" thing. I also thought that part of the appeal of pushing credit cards was that they could count your credit limit as a deposit in a twisted sort of way, then lend out multiples of that. There's just so much disinformation out there, it's hellish trying to pick through it. Now you get what running a government budgetary surplus implies. The tax money gets flushed, no new