> That it can be used to pay debts doesn't mean there are debts underlying it, implicit or explicit. It means that if you incur a debt, and you have one, you can use it to resolve the debt.
This is a misunderstanding that guides the idea that we can print money arbitrarily. I'm not saying I am right but I am saying that there's a distortion in our understanding of fiat currency that we need to keep thinking about by examining our base assumptions.
Consider: The only reason to receive a dollar is because I've provided you with a service or product. You need to pay for that, therefore you have incurred a debt (we might agree that you pay in 30 days, but even if you pay in 16ms, you had a debt for that amount of time). That dollar, then, is the value of that debt, which is the value of my labour. When it's not the value of my labour, you have either underpaid or overpaid. That dollar is just a paper. The only reason you or I think it's valuable is because we can use it to pay such debts that actually exist in reality. A dollar is an abstract unit of such a debt.
It's legal tender because a government promises to enforce debt repayments using fiat. The government creates the currency, the enforces its ability to pay individuals using that currency, and requires individuals to pay the government, through taxes, in that currency.
It should then be easy to measure the productivity of a nation by "looking" at the total money supply. If we print money, then prior valuations of productivity in such transactions are debased: I gave you a dollar for your algorithm yesterday, but today there are twice as many dollars. You would have charged me 2 dollars, had you known more would be printed!
That's the hypothesis: a dollar is a measure of value of the debt incurred during transactions between productive humans/machines. Holding that dollar implies a debt to me was paid. The dollar stores the value of that productivity for me and allows me to pay a future debt I will incur.
dollar
So humour me and ask yourself: what if the dollars in existence are, in fact, backed by debts on productivity. What are the implications on monetary policy.