I'm pleased to note that at least one major economist realises that public debt owned by the central bank of the government that issued that debt isn't debt at all.
The economist is Paul Krugman. The economy he wrote about is Japan. Japan has public debt of about 220% of GDP - way, way beyond anyone else's debt. Except as Krugman noted in 2010:
Oh, and about that debt; it's not good – but net debt is about 100 percent of GDP, not 200, because the BOJ holds so much of it.
Precisely. When you own your own debt it's no longer debt at all.
Now that needs to become part of the mainstream narrative.
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Well.. it’s still debt but if you owe yourself money you never ever have to pay it back. Perhaps we should describe it as faux-debt. You can use, in theory, as much of it as you need to keep your citizens warm and well-fed, but only up to a point if you want to trade with other countries as they will have varying perspectives on what the exhange rate should be. In order to keep it balanced, I suggest money should only be issued, debt or not, for productive ventures, those that create wealth. As much as is needed may be issued for that, to do other would be to devalue the currency.
Have you noticed our exchange rate crisis because of QE?
Get real: there isn’t one
Why not deal with the real world rather than the one you want to make up?
Actually Japan’s net government debt ratio is 130%, which is way higher than the UK’s (around 75% of GDP NET). And Japan has stagnated since the 1990s while that debt rose. Government debt per se is not bad news, but if it has to be paid back to private sector investors and has not been used to invest productively, then it hampers growth.
I was merely making thew point it was not 220%