Because of sectoral balances[1]. If the public sector doesn’t issue debt, then the private sector can’t accumulate financial assets modulo exports. This is why,

Because of sectoral balances[1]. If the public sector doesn’t issue debt, then the private sector can’t accumulate financial assets modulo exports. This is why, incidentally, the Germans want a devalued Euro. Unfortunately we can’t all be net exporters, so Germany is basically defecting in an iterated game. [1]https://en.m.wikipedia.org/wiki/Sectoral_balances https://en.m.wikipedia.org/wiki/Sectoral_balances