Keith Evans
2 min readAug 25, 2021

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If the "global debt" is actually a debt in the normal use of the word then who do we owe this debt to? Venus? Mars?

Money must be created before it can be borrowed or collected as taxes. One simply cannot borrow or collect what doesn't yet exist. The various sovereign currency issuing governments create "debt" as a way of tracking money in the economy. If those countries attempted to "pay off" their debt the only means of doing so is to "uncreate" that money via tax collection and destruction of monetary assets in the private sector.

Currency must be created to fund economic growth and the use of resources and labor by the government. If that currency is then clawed back in a misguided attempt to decrease a mostly meaningless accounting entry it would amount to the theft of those resources and labor and leave nothing in the private sector economy to store value from that commerce.

One doesn't have to be an economist to understand basic spreadsheet sectoral balance. An asset created in one sector must have a source from another. In the case of countries that create their own fiat currencies that "source" can only be the debt and any such currency that re-enters the government's books is destroyed by that debt entry, unable to be recycled to new spending.

This makes moot all of the fear mongering surrounding the debt. The "real" restraint impacting such economies is the availability of real resources and labor for which the money was created to deploy, not the number of units of measure of the nation's accounting denomination.

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Keith Evans
Keith Evans

Written by Keith Evans

Meandering to a different drummer.

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