You think of your money as yours and the government’s debt as something separate. Policymakers don’t view it that way. In macroeconomics, the public and private sectors share one interconnected balance sheet. When the government borrows, the private sector holds that debt as an asset. When the private sector is over-leveraged, the government often has to expand its own balance sheet to stabilize the system. And when government debt becomes too large relative to private-sector capacity, officials look for ways to shift some of that burden back onto households and institutions. That doesn’t mean confiscation. It means ... (full story)