Kulu,

There is another way to reduce debt and that is to increase your assets and let the assets earn money and pay off the debt or not to create the debt in the first place.

The most obvious and simple way not get into debt is for the government not to use loans as the mechanism to increase the money supply. The government can increase the money supply by first creating assets then increasing the money supply to match the assets.

What we do at the moment is to increase the money supply by creating a loan without any money to back it and hope that the money will produced a productive asset to back the money. All we need to do to fix the financial system is reverse the procedure and create an asset first then the money. Governments - or the controllers of the currency - are the only ones who can do that. The government can enlist the private sector to produce the assets efficiently but the government is the one who controls the money supply.