While the govt taking on debt manifests itself as more spending in the private sector, it also manifests as more inflation.
Even worse it manifests as lower interest rates and price on capital that are unnaturally low. Which is a problem I have as it makes it harder to solve the ecp.
Inflating away the debt isn't a good thing. It is an unfortunate thing for a variety of reasons.
If the debt is caused by excess govt spending, it can easily just be dead weight loss. The feedback mechanisms of the government just aren't there, so when it spends just to spend, it is a lot easier for it to spend money on shit no one benefits from.
So much of inflation hurts the poor. From wages being laggy relative to goods, to inflation also hurting savings, everything else gets inflated as well. Inflation also hurts the wealthy as well since it lowers asset prices. The fact that inflation is such a bad thing for an economy is strong evidence that it makes it harder to solve the ECP.
Removing the feedback mechanism of debt means that people are going to be more likely to take it on. We saw a variant of this in the 2008 crash where very low interest rates over leveraged the economy
