But they will have inherited the asset side of the debt from grandad won’t they.
That’s the connection. Debt is really saving and when people spend those savings it eliminates the debt.
That’s the connection. Debt is really saving and when people spend those savings it eliminates the debt.
Debt and savings are two sides of the same coin. If the savings disappear via spending and taxing then so does the debt.
Remember money doesn’t stop at its first use. Spending and taxing work like a stone skipping across a pond. Saving and debt is like videoing that skip and pressing pause half way through. Once you unpause by spending the savings the stone skip continues.
What you’ll note is that the stone always sinks - taxation will always match spending in the long run.