Part of the underlying understanding of economics is the belief that in a capitalistic society people will behave rationally. Unfortunately people do not behave rationally. People do not minimize risk while maximizing profit. This is not peculiar to people, but is shared with monkeys as elucidated in the clip below.
More importantly we tend to forget that money is only a symbol of wealth not wealth itself. Wealth consists of property, products, and services. A general measure of wealth of a country is gross domestic product, GDP. The general measure is flawed, but not as deeply flawed as using money as a measure of wealth.
The problem the US, Europe, and the world is having is not a money problem. The problem is a productivity problem. There are not enough products and services for the people of the world. There are many reasons for this, including but not limited to 1) people who are capable of working, but not working; 2) lack of education by much of the world's population; 3) destroying resources that can be used to create wealth - war; 4) use of resources that do not improve productivity - defense; 5) lack of research and development into new ways of increasing productivity; . . .
Money is a symbol much like letters and words that enables us to accomplish these tasks. Like letters and words need to be formed into complete thoughts, money needs to be used to enhance productivity and the exchange of goods and services. When money fails to do this, then we need to understand why. The reason why is irrational behavior. The irrational behavior starts with idea that collecting money and not using money is a useful behavior.
Government collects money. If government does not use money, then eventually all money will be collected by government and money will not be available to use to either enhance productivity or exchange of goods and services. The same is true of banks and those who stuff their mattresses. Put to much money in the hands of a few and the money ceases to have value as productivity will decrease. This is the inequality problem. Similarly if money is given away productivity will also decrease. This is the welfare problem, though there never were any welfare queens, though Reagan used to whip up people's fears about welfare queens. If only the voters could have been made welfare queen for a day, then they could have seen the truth.
Now to get to debt. We older folks really do not give a damn about money. We do give a big damn about products and services. Not only that, while we may not be capable of working as hard or as long as when we were younger, we sure as hell want to be productive. We want our children, our grand children, our great grand children, . . . to have more satisfaction than us. The issue is not one of a debt owed to us by society, but one of society having the productivity to care for all of us - citizens of the world.
Austerity is a means of reducing productivity. It never works. The rational behavior is to focus as a country and as a world on increasing productivity. The irrational behavior is to focus on debt. Can we please stop acting like monkeys.