Re a stupid argument I am having elsewhere, allow me to point out that coins and notes are government debts.
They might be freely transferable, small denomination and non-interest bearing which makes them look different to "government bonds" but in principle they are exactly the same. They record a debt from the government to whoever holds them. The note holder or bond holder has a financial asset and the government (i.e. the taxpayer) has a financial liability. Like all "money" they are not net wealth for the nation as a whole because the asset and the liability cancel each other out.
(I accept, as a matter of fact, that many governments run permanent deficits so some of the notes and bonds are never redeemed, repaid or cancelled, that is a separate issue. It does not mean that they couldn't or shouldn't be.)
Anybody who:
a) disputes, as a matter of logic, that this is the correct way of recording them and/or
b) disputes, as a matter of fact, that central banks do not record them as liabilities
is living in cloud cuckoo land.
See for example Bank of England balance sheet here, which correctly shows notes in issue as liabilities.
Please note: this is a purely mechanical thing and a description of the real world. It does not tell us whether governments should or should not run deficits. It does not say whether any of this is a good thing or a bad thing.
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