Or am I being thick and at the state / national level money, debt etc is actually more conceptual and ethereal rather than the cold hard cash I hand over every time I go to the pub?
I'm not economically minded but I think the problem comes from 'theoretical money'. In 2006 my house in the UK was valued at £135000. My neighbour's identical house sold for a similar price. They turned a theoretical value into an actual one and stepped up the ladder. In 2010 when I considered selling, it was £119000. If I had entered into re-mortgaging or financial commitments based upon the theoretical value in 2006, I would have been stuffed, as would those who had lent me money. I would not be able to settle my debt simply by selling and they would have no way of recovering their money. Property prices, which were behind a lot of the wealth people seemed to have, were all theoretical unless you actually sold the house and realised the value.
The Daily Mash has a good article today, suggesting that we scrap this economy and give everybody 5 grand to start a new one.
The Daily Mash