I thought it would be helpful to discuss how US debt is financed. I have noted some misconceptions in need of correction.
 The Federal Reserve does not buy US Treasuries at auction. It buys them on secondary markets.
 Social Security trust fund assets are non-marketable government account series issues. They cannot be liquidated on secondary markets.
[*] The US Treasury does not call the Bank of China begging to borrow. China accumulates a surplus of dollars from trade with the US and invests those dollars in US Treasury securities.
The US Treasury frequently has auctions marketing bills, notes and bonds. All noncompetitive bids are accepted. Competitive bids determine the interest rates paid.
source: Treasury Auction Announcement, 11/07 (pdf)
source: Treasury Auction Results, 11/07 (pdf)
source: MSPD, October 2012 (xls)
cf. Today’s Auction Results