Okay I'm confused.  I understand the US Federal Government is mired is massive debt. I understand how this translates into future taxes to be paid by the populace. I understand the Fed creates money out of thin air.

But how is the USD "based on debt." I don't get that... I don't even know what that means?

The USD isn't "based on" anything. It's just a fiat currency, created at whim and a certain amount each year.  Someone please educate me