"Treasuries being USD-denominated - coupled with USD's status as the global reserve currency, it does give the Treasury much more latitude to borrow than other countries. However, the Fed is the independent authority controlling money supply, while the Treasury acts as borrower for the congressional budget by issuing debt, which is lent - in the full definition of the word - by buyers of Treasury securities, be it ordinary citizens or foreign entities."
You're still not understanding how it works.
We do not have "the global reserve currency" and haven't since '72. We have the world's most vibrant economy and that means our trading partners accumulate US dollars that cannot leave our banking system. They find others who want their excess reserves and that have things they want, such as energy, and they trade without consideration of nationality.
Their only option is to hold cash reserves within their account or to purchase bonds. If they don't want to purchase bonds it makes no difference whatsoever on the ability of the US government to spend new dollars into the domestic economy.
I'm definitely not advocating for paying off all national debt overnight - like you said, it'd be a disaster for everyone. "
I would hope, once you understand what the debt actually is, that you wouldn't advocate for paying it off at all. Doing so would only move existing money from bonds to reserves (think QE on steroids) and those reserves would move right back into bonds if we didn't tax the reserves completely out of existence or end bond sales. We are talking about the total of net dollars in the economy once private sector debt is balanced out.
"My simple and perhaps under-informed opinion is that with the scars of the GFC still visible in the economy, a slightly more Austrian stance might benefit growth, in that increasing M1/2 velocity may yield better returns than pure spending. "
Where there is complexity when simplicity will explain the situation it is always wise to see who benefits from it. The economy is best understood by applying simple sectoral balance sheet accounting. Every dollar created by the government becomes someone's asset in the private sector and those assets are agreed upon payment for real resources and labor the private sector furnishes to provision its government.
The US dollar is self funding when it is created, so there is no need for "debt" as a funding mechanism. Other than the interest payments, there is no difference between dollar denominated reserves and Treasury bonds. Bonds are representative of past productivity (savings), not a burden on future productivity that must be paid back. If the government "balances" its budget and claws back all of its spending in taxation it effectively steals the resources and labor it uses. Tell me how that is sustainable, or even sane.
"My hope with this piece was to help normal people like myself develop a better appreciation for national issues and how they impact personal finances. After all, debt is notional but interest payments are real, and the revenue that services interest comes from taxation and inflation."
Your effort may be completely innocent, but I predicted that we would see a flurry of anti-debt fear mongering as soon as a Democrat was elected and given a majority in Congress. If the people ever discover the reality of their currency and how their government creates it the attack on the Capital in January will appear as child's play in comparison to the potential reaction it could cause. Americans have been robbed of their birthright by a very well organized campaign of misinformation over almost a half century.
