You see, that property of a fiat backed economy is that money may be loaned into existence…
I assume you were referencing the Federal Reserve with fractional reserve banking or Treasury instruments. Neither “creates” currency because the contract requires repayment in existing currency. Both have the power to create “accounts”, but issuing/creating currency is still the monopoly task of Congress, even if it doesn’t realize it, or admit it publicly.
Congress currently creates currency when it retires Treasury instruments with new currency, not by the initial borrowing which, again, requires existing currency. The monopoly issuer of the currency can not “borrow” its own currency as a function of creating currency. At some point in the transaction it would already own the currency it wanted to borrow. This is why the budget category “debt” isn’t truly debt in the common definition of the term, which is why politicians, and most of the populace, get it so wrong.
Congress creates currency when it spends and “cancels” currency when it taxes. The monopoly issuer of currency doesn’t need our currency to spend currency. If we should ever be so foolish as to attempt to pay the debt, or even deficit spend in insufficient numbers to compensate for trade deficits and wealth accumulation, we will (have) see an almost immediate depression. One will strip all currency from the economy and require resources to be sold in some denomination other than the dollar, and the other, which politicians appear to favor, will slowly drain the economy of currency and force the private sector to leverage its own debt, until the bills come due in “real” currency that is short supply.
Since this has held true for the only seven times our nation has ever reduced the debt one can only assume it to be constant. The bottom line is that we don’t owe $17 Trillion. We “OWN” $17 Trillion.