I have heard that each bill of money printed can be seen as debt, however I dont understand this. When money is printed, it is initaly held in the fed, this lowers the fed funds rate because now they have more willingness to get rid of this money. Supply goes up, and demand stays the same, so price (intrest rate) goes down. However when its lent out, it is the government that is the lendor, and not the one in debt..
This is probably a easy question for many of you, but since its so fundamental I think its important that I understand it.
First, we have to make a distiction between the Federal Government and the Federal Reserve. Although they both have the word Federal in it, they are NOT one and the same. The Federal Reserve is a Central Bank. Not only is it a Central Bank, but it is a FORCED monopoly on money and the money supply. The Federal Goverment is the Government of the United States of America (supposedly;). It is NOT the lendor. It is a borrower from the Federal Reserve. That is how money can been seen as debt.
I am sure others will have a far more detailed explination…