Banks haven’t used fractional reserve banking since ’34 when the gold standard was abandoned domestically. They now simply create credit accounts for borrowers and the Federal Reserve creates reserves in the lending banks account to match the principal of the total loan contracts it carries. Since the Fed charges interest at the overnight rate on those reserves they are a “liability” to the bank that is always balanced to the loan contracts as assets.

Since this is only to enable interbank transfers of loaned funds and is paid down as borrowers retire their principal balances it is not considered to be money “creation” that would violate the government’s monopoly on issuing the national currency. Paying down or paying off a loan at any FDIC covered bank diminishes the money supply in circulation. FDIC insurance, part of the Federal Reserve Act of 1913, makes retaining reserves unnecessary and bank accounting much simpler.

There is another type of money that you missed (surprising because it is the primary currency used in every modern economy), chartalism. Chartalism “taxes” money into existence, but not by collecting a tax. Simply imposing a tax on the population and only accepting official state-created currency in payment creates the demand a currency needs in the economy to become widely accepted. Since that acceptance is the objective, not placing everyone in jail for non-payment, the issuing government must first spend its currency into the economy prior to actually collecting taxes. Taxation can never “fund” the government’s spending for this reason.

This order of processes means that any such currency is “fiat” and any pinning to a commodity or exchange rate is only a limitation on how much can be created without diminishing the value of all its currency, not a necessary function of provisioning the government. It should also be evident that to gain acceptance as the denominating currency of trade the currency must be issued by the government in sufficient excess of its demand for taxes to serve as a store of value and enable its citizens to retire any private sector debt.

This excess was once defined by the amount of gold the government held in reserve, but that proved to be a horrible system for any net importer which would experience constant reserve drains to its trade partners. This drain, as our partners in the Bretton-Woods Agreement began rebuilding their productive capacities after WWII, prompted Nixon to leave the agreement and make our currency completely fiat. This had the effect of changing our monetary system rather drastically, but the impact of this change was not recognized or was not accepted, by the majority of the citizens or lawmakers

For one, the removal of the gold reserve as the definition of currency value moved that definition to each commodity or service the currency was deployed to purchase, effectively making a “resource-based” economy. The issuer of the currency, Congress, became the defining authority in establishing its value by its spending into the economy. Secondly, as the monopoly issuer of the currency, Congress could never involuntarily default on any obligation denominated in its sovereign currency, making that currency a no-cost commodity Congress could use to shape the economy “for the general welfare” as mandated in Article 1: Section 8 of our Constitution.

Thirdly, and more germane to your conflict about the quantity of money in circulation, each country’s “debt” became the sole record of the “net” (after private bank debt is settled) total currency in circulation in their respective economies sans a gold reserve. As the order of processes dictates that spending proceed any collection of currency by the government it naturally follows that would include “borrowing”. Currency is created in the private sector and any excess above the total tax obligation is “matched” (not funded) with Treasury bond issues. This was a function of defending the gold reserve over the period between spending and collection of taxes and never did “fund” any operation of government.

It is now only useful in providing leverage to enable the Fed to set interest rates by buying and selling Treasury debt and establishes a floor for investor ROI. Considering the limited effectiveness of monetary policy in a fiat regime and the propaganda value of a simple asset swap, our national “savings”, given the title “debt” we should probably just set a permanent zero rate, or pay a small dividend on excess reserves, and eliminate Treasury bonds entirely except for select entities.

Just a rough guess at the cause for the discrepancy in the numbers you present would suggest that there is a misunderstanding about the function of the debt, causing it to be double counted for all nations with fiat currencies. It certainly wouldn’t cover all of such, but with just the US national savings/debt at $20+ Trillion currently, it is significant. There is no “money” in those Treasury bonds and they are recapitalized only on their maturity with new dollars created as “debt service” in the non-discretionary budget. Until then, they represent no portion of the net money supply in circulation except as accounting entities.