All money is backed by debt. If all debt is paid off then money goes to 0. Basic math.
Money has value because it has scarcity as one of the principle characteristics that give it value..
- Less debt, or zero debt, means more scarcity as the money supply shrinks, but the value of the currency increases, not decreases, just as when you increase debt and the money supply, you decrease the value of your currency. That is the basic supply/demand principle of Econ 101.
Perhaps we will never agree on that one.
I am obviously a fan of Mises, and Hayek and the Austrian School.
Answer: Treasury auctions run by the Fed. (Bills, Notes, Bonds, etc.).
What do those instruments being auctioned represent?
Debt. Also known as a "promise of the future labor of US citizens.
All money assets are backed by debt on the opposite side of the balance sheet.
Maybe the following article will help - although there are points I disagree with in it - such as the fact they never identify what debt truly is - claims on future labor.