To pay the bills the Treasury just issues “give me money IOU’s” ie :Treasury bills, notes and bonds all loans to the government to pay for the stuff we don’t pay for with our tax revenue (note:the only thing that makes these government loans have value to the buyers of this debt is the ability of the government to tax its people) they sell these on the market, those loans are the peoples debt, we like to think of it as not ours its the governments we don’t feel the pain of this debt because it is not being paid for by us, its just accumulating for our children and grand children to pay.

The Federal Reserve directs the government Treasury to print money (out of thin air) much like a counterfeiter does but for government its legal and buy back some of these IOU’s this dilutes our money devaluing the spending power- a hidden tax on the American people. Your money is weak and can’t buy as much as before “inflation”

http://www.heritage.org/federalbudget/entitlements-consume-economy

To understand baking free instruction
https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/banking-and-money/v/banking-1