The fractional reserve banking system consists of four main steps. The first step is the central bank, who creates the paper money. The second, is the government putting the money in the bank and this way legalizing it. The third one is the bank giving loans to people. The fourth is people having to pay the loans at a bigger price due to interests. Then, the cycle repeats.
The central bank also receives more money than what they lent. It is possible because the cycle is never ending. Th U.S. government will always be paying the central bank and will never end paying because the money that is created is what the give back. The will never have more money than what it exists. This is why the cycle is never ending. The people also have no pay more than what they receive. If there is no debt it means there is no money. This means that there will always exist debt.
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