The Fed holds $1.1 trillion in Treasury debt. You could erase $1.1 trillion and the government would still be $12.9 trillion in the hole.
I'm not saying the Fed buys ALL US Gov't debt - only that without the FED, the US Gov't would be subject to some severe discipline. And who will finance the next 5 years of projected Trillion-dollar-per-year deficits? Are the Chinese and Japanese suddenly going to find the desire for massive increases in US Treasury debt?
The FED is the Central Planner's dream. Accept it, and you accept the idea that a few guys in a room can manage the optimal interest rate and money amount for the US economy. We know that notion doesn't work for steel, corn or cement - why does anyone believe it works for money?