Let's say I borrow a million dollars from bank A for a specific purpose - say buying a home . Then the builder i bought the home from , in turn can go ahead and buy Treasury bills .. debt increased .. Now gov takes this money and spends on say an education program - the recipients can buy more Treasuries with a fraction of that money .. So debt keeps on multiplying.. cuz dollars are perfectly fungible .. But saying that US debt is out of control is incorrect .. if you compare with China .. their currency supply is 44 Trillions ( more than double of US ) . And debt is also at the same level if you take into account the debt they (China ) issue through state owned enterprises ..