The Definition of Public Debt

Executive Summary

• Public debt is a feature of countries that have a private central bank.

Introduction

Public debt exists because of a private central bank. The government goes into debt every time it issues a bond. From here, debt is created. However, when the government creates its own money, there is no bond, and no debt is created. A government can then spend money but simply creating money (or making loans). There is no debt and no necessity for interest. A government could charge interest, but it would not need to charge its citizen’s interest if it could create its own money.

Public debt is created when a government allows private banking interests to take over the ability to issue money. In each case, the government becomes indebted to the privately-owned central bank. Without this feature, governments would not have any debt.

All public debt can be eliminated by simply eliminating all private central banks and with each government maintaining its sovereign right to issue its own money. Any interest due would be paid off with the county’s own money. As the privately run central bank never had any logical right to create money in the first place, there is nothing to “payback” to the central bank. Private bankers have already made enormous sums acting as a parasite on governments. This is generally known as central bank nationalization.