Steve Keen: Gov't Bonds are an asset of the private banking sector - not households!

 The government does not bank at the "private banks" but instead the government banks at the "central bank" using reserves. Interest on bonds increases reserves. Bonds are bought with reserves. 

Put the government account as something that is owned by - a liability of the central bank and then all the operations pass through reserves. So interest is on bonds increases reserves. Bonds are purchased using reserves...Government spending increases reserves...and taxation reduces reserves... 

So you divide GDP by government debt.... based on the velocity of money...  selling bonds increases government debt but the money turns over as increased gdp. Rising level of private debt decreases the velocity of money by decreasing private spending...

 The government is the only entity that can cope [with debt] because it creates the money supply. The money that it borrows should be used to build the infrastructure...like public services....health, welfare, education, infrastructure maintenance...