Seniorage on digital currency is 100% assuming a real money currency, but the USA uses credit notes as currency rather than real money so the argument goes out the window.

The writer forgot that the Federal Reserve System is not owned by the US Government/People/Republic. The Privately Owned Fed gets the "seniorage' - but they must desyroy the seniorage when the bonds (debts) are paid so in the end the Fed only earns the interest on the seniorage but not the seniorage itself. Since the US always borrows (or prints by issuing bonds to the FED) more than it pays off (so far and for the forseeable future) the balance sheet of the Fed keeps growing and the debt of the USA does the same.

So the "seniorage" is not a revenue to the USA but instead an IOU from the USA to whoever holds the resulting credit (Federal Reserve Note). In other words the trade defecit of the USA to the world is the what the USA owes to the world that it has not yet paid (in goods/services/assets).

If the US Treasurey were to issue asset backed United States Notes (as JFK did - Silver backed - and we no what happend to him) then seniorage would come into play for real as the US goverment would benefit from the differnece between the cost of assets (at acquisition) to back the notes and the value of the notes as determined by the the market (what does the face value buy you).

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