[neilwilson]

It’s rather more simple than that. In a floating exchange rate world, which is the one we live in a dollar is just a 0% bearer bond.

So when a government bond matures it is replaced automatically with a simple bank deposit. It’s nothing more than an asset swap.

“People with savings” are precisely why there is a “debt” in the first place. When they spend those savings they pass tax points which then creates the tax that retires the “debt”.

To put it in simple terms the “grandchildren” will “service the debt” using the counterparty “savings assets”inherited from their “grandparents”.

Don’t fall for the standard narrative. It’s not true.