[Note: This is the second article in a series. If you haven't seen the first one yet, here's the link to Money: The economy's lubrication.]
One day I was in the vault at the bank, staring down into my safe deposit box. Staring back up at me was a small bunch of US Savings Bonds (...fewer than I'd wished, but that's beside the point).
It struck me:
"According to the economics textbooks, those bonds aren't 'money.' But on the other hand, like money, they're backed by the 'full faith and credit of the US government.' That means they will be worth their face value, in money, on maturity day. Therefore, they represent FUTURE money, and I own them. In other words, my govt-backed 'financial wealth' equals my money plus my future money; i.e., money plus T-bonds."
[Later, I learned that the technical term for the public's money-plus-T-bonds is "net financial wealth." Makes sense; those T-bonds do make me feel that much wealthier.]
But another term for "T-bonds" is "national debt"—and I'd been trained since boyhood, with good reason, to have a healthy respect for the word "debt." Debt can help an individual or a company—or a government—do more things sooner; but if those new things turn out not to generate enough benefits to at least service the debt, unpleasant problems can result. That's why debt deserves respect: it can be a helpful boost, but it can also turn out to be a heavy burden. Debt is a two-sided coin, so to speak—or maybe a better metaphor is a two-sided ledger (...for every debt, there's an asset). One side represents hope, and faith in the future; the other side represents pessimism, and fear of the future.
On the list of emotions, fear is the number one motivator. Because politicians are in the business of "motivating" us, I strongly suspect that's why they universally embrace the term "national debt" in their speeches, and universally avoid the term "Treasury bonds": they are attempting to "motivate" us. 
To illustrate, try this mental exercise just for fun: Try to envision John Tanner, Jim Cooper, or Dennis Cardoza—all Blue Dog Democrats fond of propagating debt-phobia—getting up in front of the C-SPAN cameras to ask us:
"Do you realize how many times your T-bonds would stretch to the moon and back? I’m talking about the T-bonds sitting in your safe deposit boxes, backing up your money market funds, and securing your insurance policies; in other words, I'm talking about all of that US-government-guaranteed wealth you own. Any idea?"
Of course, their answer to that rhetorical question would be forthcoming:
“That wealth would stretch to the moon and back three times!”
Well, I don’t know about you, but here’s what I’d be thinking at that point:
"What? Is that all? That ain't squat! I need my share of that government-backed wealth to grow a lot larger, and I need the dollar to retain its value, so that inflation doesn’t reduce the future purchasing power of all that government-backed wealth. Do you Blue Dogs have any ideas for fostering that—as opposed to your plans for increasing my taxes so you can take my bonds away from me?"
Don’t worry. We’ll never hear anything about "our T-bonds" from Tanner, Cooper, Cardoza, or their fellow fear-peddlers. They aren't ready for that kind of thought process on the part of their constituents, and we can be sure they wouldn’t do anything to provoke it.
In any case, the public’s “net financial wealth backed by the full faith and credit of the US government” is the public's money plus the public's T-bonds. Whenever I hear a politician trying to scare me about the “national debt,” all I have to do is form a mental picture of that little bunch of bonds in my safe deposit box, and think:
“Yep, you’re right. The wealthiest nation in history happens to owe me some of its money. I like that situation, and I plan to make that small bunch of bonds grow larger. They’re the safest investment on the planet.”
[...by the way, a lot of other T-bond holders, domestic and foreign, think the same way I do about that.]
That’s my plan, anyway. But if it’s going to succeed, I need to understand where to get those T-bonds. (I already know the source for our money supply: it’s the so-called printing press at the Federal Reserve—the one the Fed is supposed to run at just the right pace to keep our real economy growing at its full potential, as I discussed in the first article.)
But where will my extra T-bonds come from? There are only two possible sources:
• existing bonds, already printed up, that someone else will sell me; or
• brand new bonds that the US Treasury will print up, then sell me.
[For a hint as to where this series is going, think about those two bullet points. Why do those existing bonds exist at all? What conditions are necessary for new bonds to come into existence?]
Anyway, here’s a graphic summarizing the sources of our government-backed financial wealth. 
Next time, in the third article of this series, I’ll discuss those two printing presses in more detail; i.e., the important interplay between money, T-bonds, the Fed, the Treasury, and the Public.
======================
UPDATE: Here are links to all six articles in this series:
1 - Money:
The economy’s lubrication
2 - Two
Printing Presses: One at the Fed, One at the Treasury
3 - How the
Fed creates money without creating socialism
4 - How the
US Treasury pays back the debt
5 - The
public’s T-bond supply
6 - Paying
down the debt: Our dubious history, and a startling conclusion
======================
