Debt is a distributional issue. It nets down to zero as for each debtor there must be a creditor.

Yes and no.

Debt also allows you to invest more than you save, or to save more than you invest (in real terms).

When you work for me, and I pay you in an IOU rather than in the products of your labour, then I have invested your labour, but you have not accumulated any real stuff - only a claim on me. If you exercise that claim, then I have to give you money whether or not you intend to invest it in real stuff.

Debt therefore means that you can have periods in which everybody wants to save more than they want to invest in real stuff, which is what creates mass unemployment. It also means that you can have periods where people want to invest more than they want to save, which is a precondition for the growth rates we have come to associate with industrial society.

- Jake

Friends come and go. Enemies accumulate.