If the public debt is a debt that we owe to ourselves, then there are obviously no problems connected with such a debt. Critically evaluate.

What will be an ideal response?

While the fact that we owe much of the debt to ourselves may alleviate much concern about the size of the public debt, it does not mean that there are no problems connected with it. Several difficulties exist: the owners of the debt tend to be those in the higher income categories and payment of interest on the debt then contributes to income inequality; if the ratio of interest payments to GDP grows, the nation’s tax burden rises which may have some impact on work incentives; financing the debt requires public borrowing which could crowd out private investment borrowing and spending.