Wise words from William Vickrey
The failure of successive governments in developed countries to embark on a vigorous policy of reducing unconscionably high levels of unemployment has been due to ‘viewing with alarm’ the size of the national debts, often alleged to be already excessive, or at least threatening to become so, and by ideologically urged striving toward ‘balanced’ government budgets with- out any consideration of whether such debts and deficits are or threaten to become excessive in terms of some determinable impact on the real general welfare. However if they are examined in the light of their impact upon welfare, they can usually be shown to be well below their optimum levels, let alone at levels that could have dire consequences. To view government debts in terms of the ‘functional finance’ concept introduced by Lerner, is to consider their role in the macroeconomic balance of the economy. In bare bones terms, the significant function of government debts is that they provide assets into which individuals can put whatever accumulated savings they attempt to set aside in excess of what can be wisely invested in privately owned real assets. Debt that is smaller than this will cause the attempted excess savings, by being reflected in a reduced level of consumption outlays, to be lost in reduced real income and increased unemployment.
Source: Lars Syll article, RWER blogs https://rwer.wordpress.com/2022/02/09/an-mmt-perspective-on-the-public-debt-problem/