Why do we think so wrongly about money?

Words matter.

“Debt” is a word that evokes powerful emotions. When used in association with our government it implies a burden on the people, irresponsibility, fiscal cliffs (whatever that is), sovereign bankruptcy, or worse! The media, blogosphere, and water cooler is rife with such sentiment.

Over forty years ago when some currencies were convertible to gold, national debt DID have meaning. Nations like this (and current European nations that use a currency and do not issue their own currency) have to run trade surpluses to keep reserves of gold (or Euros) or they risk going to the bond market to borrow at rising interest rates. Nations that issue their own currency (US, UK, Japan, Canada, New Zealand, Australia etc.) control the rate they choose to pay those who save their currency. "Debt" is their choice to give savers an interest-earning alternative to reserves. It is NOT the same thing as real debt, and the word keeps us from using our national money to help the economy and maintain full employment.

Debt carries weight and meaning. It affects our perceptions of right and wrong. It fills our minds with worry about the future. 

Debt implies borrowing. We are led to believe that the government has to borrow money from the people. 
It doesn’t.

Borrowing implies someone first had to save that money. We are led to believe that our government takes money from private citizens to spend on people (so-called “transfer payments”) or things, leaving the private sector with less money. 
It doesn’t.

Saved money implies that when the government borrows, money is being “used up” that could be invested in something else. We are led to believe the government “debt” takes away our opportunity to invest in more productive things. 
It doesn’t.

Debt implies a lengthy financial burden. We are led to believe the government must make future generations labor under its weight and suffer lower quality of life until it is all paid back. 

It doesn't. 

Perhaps we should banish the word “debt” from all discussions of national government money! (Of course debt is still highly relevant to cities, states, households and businesses because we don’t issue our own currency!) National debt is an entirely unhelpful term, terribly misleading to the public, and wreaking havoc in political discourse and public policy.

We can simply say that we do not have national "debt". Any government spending that is not taxed back becomes our savings in the form of currency, bank reserves, and bonds. We get all the benefits of that spending for the common good if we use it well. Let's shift our discussion from debt ceiling despair and deficit hysteria to a more hopeful perspective; how best to use our national money for our current needs and those of the next generation.