1)Congress votes to increase the Federal debt limit.Let us say by $1billion,and instructs the US.Treasury to write interest-bearing Bonds for $1billion.
2)The treasury offers the Bonds to the FED against the taxpayers' ability to pay.
3)The FED buys the Bonds by simply creating a book keeping entry for $1billion to the credit of the government's checking account.
4)The treasury can now write checks against the created credit.
5)These checks are dispersed throughout the country,endorsed by recipients and deposited into Banks.
6)The Bank send the Treasury checks to the FED to be cleared.The FED debits the Treasury's account and credits the Banks with the amount.These credits increase the Banks' reserves.These reserves serve as the base used by the commercial Banks to create checkbook money and to lend it out at interest.