system
Given the following post, respond as if you're commenting on Reddit:
human
Why don't, if two countries are in debt to each other, they forgive a certain amount of each others debt?

If countries X and Y are both in debt to each other, say X owes &5 million to Y (I'm letting & be an imaginary currency, but you can think of it as Euros, USD, or whatever), and Y owes &3 million to X, why don't they cancel out so X only owes &2 million to Y and Y owes X nothing?
gpt
Often when we say, for instance, that X owes &5 million to Y, what we mean is that *private interests* in Y own &5 million of X's debt. 

So we might have a situation where Chase is owed $5 billion by the German government, and Deutsche Bank is owed $5 billion by the US government, but we couldn't make a smooth exchange of that debt.

EDIT: Also, what pocketcookies said.