I am most happy to hear any short explanations that “normal” people can understand to explain that…
John Whitling

It will be difficult to explain public debt=private reserves unless people understand spread sheet accounting and can see that what they are being shown by politicians is only half of the needed information. Managing an economy isn’t the same as managing a budget. When the spread sheet is divided between public and private, instead of simply income and obligations of the public side, we can see that debt is money that went somewhere and stayed there, not captured in taxation.

Since it is the responsibility of congress to manage the (private) economy, with the budget simply being a record and projection of public transactions, the spread sheet then can be likened to a bathtub in which we wish to keep a level of water that represents full employment and productivity. There is plumbing into and out of that tub that represent faucets and drains. The faucets would naturally include government spending (currency creation) and trade surplus. The “drains” would be taxation (cancellation of currency), savings, and trade deficits.

With government being the “sole” source of currency creation, no matter how great the wages and business profits are, and not restrained by being pegged to a commodity, it is critical that currency is made available to purchase the goods and services as the economy creates them, but not more than can be absorbed by that creation. Taxation then becomes a method of extracting currency from the economy/market, not a source of revenue for the government that doesn’t need a source of revenue to spend. Taxing for revenue means the bathtub level never changing except by the insidious drain of trade deficits and savings, making both trade and wealth soft targets for politicians.

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