Double Entry Accounting - What Does It Do to the Balance Sheet?

When the government does deficit spending, it blows a hole in their balance sheet. Non-financial assets think like houses, shares that the initial value of a share or the increased value of share over time are non-financial assets. There's an asset with no matching liability. Now the government in that sense has the asset of the entire country. So the government can cope with massive negative equity. In fact, its negative equity is the public's positive equity.

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