Federal debt — Can the government pay its bills?

Terry Says

Congress has to pass an appropriations bill to authorize spending.  And it also has to pass a bill to raised the ceiling on the national debt if that spending will lead to more borrowing.  The issue won't come to a head until late summer or early fall in 2017.  It is theoretically possible (given all the idiots in Washington) that there could be a standoff, in which the government could not pay its bills. That's not the same as "running out of dollars."  Theoretically, the government can't "run out" of dollars, because they can "print" the money.   Money is created  by selling IOUs (Treasury bills, notes and bonds).  The Federal Reserve "creates" the dollars (new credit) by purchasing those IOUs, and writing a "check" to pay for them.  When bank that own the IOUs and sold them to the Fed "deposit that check" it is newly created credit (money) put into the system.