ScienceGuy

Suppose there's a closed economy. Now imagine a household (economy) with two people A and B in which B always borrows money from A.

There is a lot of concern in some quarters about central banks printing money to finance large budget deficits. And in other quarters there is concern that central banks are doing too little of it. Some worry that central banks are lending directly to the government. Others are assuaged when central banks buy government debt in the secondary market but not directly. Who is right? My summary of the article by Dr. Rajan (find the link of the original article at the end) where I have used balance sheets to visualize the flow. Meanwhile, I also found a few points which I found weren't mentioned in the article. Feel free to comment on what you think about it. Click here  to read the original article. 

Is government debt a problem? There are two parts to a question of government debt: