RE: Have You Heard of Modern Monetary Theory?
Good points. But it occurs to me that the view "National Debt" is savings hypothesis is flawed offset by the fact that a large amount of those debts are owned by foreign entities. Okay, so they are still someones savings, but noone in our country and hence not a true reflection of the health of our nations savings. At the extreme end none of the debt could be held by Americans! Unless these foreign entities are active trade partners that we have a trade surplas with (i.e. most definitely not China) then those overseas savings don't really do us any good, in fact I'd hazard a guess they are net negative that enriches other countries who don't share our values by payment of interest to them.
According to Wikipedia as of 2014, 47% of all public debt was owned by foreign entities. Wow. I wonder how different the US would be if it was all held by Americans? Maybe people would have a completely different relationship to the national debt which is more in line with your "Savings" description. The interest would enrich our economy, and the government would be beholden to us, not overseas entities when making economic and fiscal decisions. What a novelty.
Another factor in the equation... is that banks make money too - using debt. That whole fractional reserve thing that basically amplifies debt in the system. I don't see any discussions about how cryptocurrencies and blockchain based tokens differ from real banking because of the lack of fractional reserve banking. You can say what you will about BTC being a Ponzi scheme but no one, to my knowledge, is magically creating Bitcoin out of thin air using debt.
It's common to hear people in the US media lament the $1 trillion debt that's owed to China. This 'debt' is nothing more than $1 trillion in savings that China has in their account at the Fed.
You are correct to say that it's not a true reflection of the host nation's savings, but data exists to help you figure out that amount.
If the savings will continue to be saved (including the interest), then I don't think it will make the kind of difference that you're thinking of. If the savers decide to spend the money, then things will change.
You're also correct that banks create money (well, credit that gets used as money). However, they don't use the fractional reserve model that you see in textbooks and You Tube videos. Instead, they use something called the credit creation model. In a nutshell, banks can create as much credit as they like (with fewer constraints than fractional reserve). What matters to them is whether or not they can find credit-worthy borrowers.
Bitcoin is a form of 'acknowledgement money' - it acknowledges the fact that someone did 'work' to mine it. However, unlike work that you or I do, the acknowledgement that Bitcoin provides lasts forever and doesn't diminish over time (though the price fluctuates). The credit money that banks create gets destroyed when it's paid back to banks, just as the money (effectively tax credits) that the central bank creates on behalf of Government get destroyed when paid back to the Federal Government in taxes.