For fiat money, "it is backed by government bond" is very simple and easy to understand for everyone, so they never question further.
The grandeur of the bodies that invest in a fiat currency's success (e.g., those of government and government contractors) inspires confidence in third-parties about that success.
Ofcourse the government controls how much is printed and rarely adds to the overall lump sum. Many people ask why we do not print more money and the answer is always that it will devalue the current supply. But, there have been several times when the government has issued fresh supplies.
If this were not true, then we would still be using the same couple of millions dollars that the countries got started on. While digital currencies seem to be the future, the finite supply is the last hurdle that BTC will have to face.
If you compare today's prices and salaries with 100 years ago at the founding of the Fed, you can see how much money has been created.
Most modern money starts out as credit issued by commercial banks (but are really borrowed from depositors.) The Fed props up this system, but doesn't directly create much money.
We may own our money outright, but if you trace down who paid you that money, and who paid that entity, etc., you always end up with debt. The vast majority of credit comes from private parties who believe they will be paid back. But the only way that can happen is that both the economy and the mountain of debt keep growing. If, for whatever reason, the creditors collectively decide that they won't be repaid, there will be hell to pay, unless the elites keep lubricating the system with centrally planned goodies of one kind or another. But central planning, over the long run, sucks the life out of the economy's vigor, the very thing the system ultimately depends on for survival.
So, you see how this thing makes no sense, except to enrich the elites for the time being.
