""no money in the system available to purchase bonds without such deficit spending." This would only be true if the bonds were required to be held only by U.S. entities, (which even if it was law those entities could get foreign loans using the bonds as collateral). "

Other than some small amount of cash, all US dollars exist only within the Federal Reserve system and are balanced with Treasury bonds. Other non-US entities can hold Fed accounts, but those dollars never leave the system and the Fed is the single clearing bank of all "net" dollar denominated monetary assets.

"There are other sources of money that don't require deficit spending and if the return on bonds were high enough entities would sell other assets to buy the bonds. "

Eventually, bond sales are always limited by the offering made by Treasury, which is always equal to its deficit spending. If some reserves are held in accounts and not recovered by such bond issues, the Fed will buy/sell enough to cover any shortfall. There is no money in the system that isn't balanced by a debt contract that isn't represented by some previous deficit spending by Congress. After private sector bank debt is accounted for, the accumulated deficit of all spending, the national debt, "IS" our net money supply.

" When the U.S. ran a surplus the Treasury was still able to sell bonds."

Not true. Treasury bonds may have still been available at various stages of maturity and offered by the Fed or their owners, but no "new" bonds were offered by Treasury without deficits. The required taxes to create such a surplus condition would have left no reserves in the system to enable such sales.