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Basically, what he's saying is that under the current system, you either have to run government deficits or increase private debt. There's no trade off.
I haven't listened to your clip because Larry Summers at this point isn't worth the air he breaths... But because we're an importer nation, we have more dollars leaving than coming in, so somebody has to hold that debt.
This isn't obvious by now? There is no "equity" on the books. All money is debt that nets to zero.
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