From the perspective of debt economics, government is not the source of wealth and is not naturally the client. It is more like a trustee of public credit, an enforcer of rules, a risk backstop, and also the most dangerous debt expander.
The question is not whether government should exist. The question is when it maintains the claim network and when it begins pretending to be the super client of the whole society.
Credit Foundation
A claim system needs basic order:
- property rights can be confirmed;
- contracts can be enforced;
- fraud can be punished;
- collateral can be registered and liquidated;
- bankruptcy can be reorganized;
- taxes and public accounts are credible;
- violence and war risks are controlled.
These cannot be fully solved by individual households, companies, or municipalities. The most legitimate role of government is to maintain this public credit foundation so that people dare to lend, repay, invest, and make long-term commitments.
In this sense, government should act more like a referee, registrar, and liquidation-rule maker than a direct allocator of all resources.
Government as Debtor
When a government issues debt, it promises society that future taxes will repay today’s money.
Good government debt should correspond to public assets and future tax bases:
- roads, water systems, power grids, and ports;
- schools, hospitals, courts, and public security;
- disaster prevention, public health, and cross-regional infrastructure;
- systems that lower long-term risk and improve future production or living capacity.
Bad government debt delays contradictions:
- borrowing to maintain welfare or redundant staffing;
- borrowing new money to pay old interest;
- supporting asset prices;
- subsidizing inefficient enterprises;
- building image projects without real cash-flow or public-risk logic.
The Boundary of the Super Client
Large infrastructure, defense, and cross-regional public safety do require government as a super client in some sense.
But these should be exceptions, not a permanent expansion into every part of the economy.
Core Claim
Government debt is not naturally safe or naturally harmful. The key is whether the debt transforms claims into future tax base, public assets, and lower risk, or whether it simply keeps the debt machine running.