system
Given the following post, respond as if you're commenting on Reddit:
human
Where does all the debt go?

So me and my friends were discussing economics and the recession and trying to figure out how it all works and we think we've figured it all out except for one thing.

So as far as we can tell, the big problem is that everyone's in debt and owes money that basically doesn't exist. As in there's more money owed than there exists. The analogy we were using to wrap our heads around this is if each of the three of us are our own closed economic system and we each had €1 but each of us owed €10 to each other than although only €3 exists in total in the system, €30 is owed which means there is €27 that just doesn't exist so the question we have is, if this is the state of the current economy, where does this €27 go? Does someone always end up with this fake debt forever or is it gotten rid of somehow or have we just completely misunderstood everything?
gpt
There is actually 33 Euros in your system; there are the 3 Euros of cash, and 30 Euros of assets in the form of debts that other people owe to you. In your closed economy, there is also 30 Euros of liabilities, so on the net, the 3 of you hold 3 Euros.