The United States National Debt is the Amount of Money the United States has Created not Borrowed

My position is that the United States National Debt is not how much the United States has "borrowed", but it is how much the United States has created. Reasons why I believe this. #1) If you look at the Federal Reserves balance sheet http://www.federalreserve.gov... You will see that all currency in circulation is a liability to the Federal Reserve and the asset the Federal Reserve uses for this liability is debt (aka securities). #2) If you look at the balance sheet for all Commercial Banks in America http://www.federalreserve.gov... You will notice that all bank credit has a corresponding liability. So all loans and all deposits are accounted for. #3) In 2010 alone, over $3.8 trillion of the National Debt matured. This figure is not included in Govt expenditures. The only thing that exists on Govt spending is the amount they credit bank accounts (aka create) and interest on the national debt. If you look at the past 40 years since we officially left the gold standard, the national debt has never decreased. Not once in 40 years. This reasserts my theory that the national debt is the base of money that can not be destroyed. #4) So if you put all this together, and you realize that every dollar is someones liability whether it's the banks or the Federal Reserve, then paying the principal on maturing national debt with tax dollars would be impossible because this would create a dollar that does not have a corresponding liability. The dollar would be "in float". My position states that deficit spending needs to be "borrowed" because that money does not exist in our system and the debt instrument that corresponds to this "borrowing" is actually where money/assets are created in America. Therefore the National Debt is not how much the country has borrowed but how much the country has actually created. For the perfect analogy, the National Debt is basically the amount of gold we would have in the Gold Standard. The way this is created is through accounting by various entities within our system, specifically the Treasury, the Federal Reserve, and the Primary Dealers. In fact 70% of United States debt is purchased by Primary Dealers who are required to participate in every treasury action. The Primary Dealers are using bank money to purchase the treasury's which creates an affect where Govt spending actually occurs before money is debited out of the system. For those that understanding basic accounting principles, this is how the process looks when a Primary Dealer purchases a treasury security from the United States Treasury. Bank A (Primary Dealer) Initial Balance Sheet Assets | Liabilities Reserves - 10,000 | Deposits - 10,000 The Govt issues $5000 in debt to pay for a widget. Bank A purchases the $5000 in debt. The new balance sheet looks like Assets | Liabilities Reserves - 10,000 | Deposits - 10,000 Treasury - 5,000 | TTL Note Account - 5,000 You notice how the Primary Dealers bank account now has an additional asset, the Treasury, and it's corresponding liability is an account at the Treasury known as a TTL Note Account. Now the Govt issues $5,000 to pay for the widget. Bank A's balance sheet now looks like Assets | Liabilities Reserves 15,000 | Deposits 15,000 Treasury 5,000 | TTL Note Acct 5,000 As you can see the private sector receives Government spending before the Government has debited our account. So therefore, deficit spending adds money to the system that eventually is used to pay our taxes and invest in Govt securities in the secondary market. In conclusion, my main theory is that the United States National Debt can not be paid off by current accounting principles and that the National Debt is actually the amount of money that has been created in the United States of America.