Are we to assume that for every credit/debit there has to be an equal credit/debit somewhere else to offset the first?
The Federal Reserve and/or the Treasury print money. At the time of printing, what is the value of a $10 bill? Is it $10? The value of the paper that the note is printed on? Each bill has a serial number on it. What is it backed by?
Simon, if I ask you to paint my flat for $100 and you agree and paint my flat, you give me a bill (invoice) for a $100. I give you a $100 dollar bill and therefore have discharged a debt. Hence the phrase the bill is legal tender for all debts, private and public.