The paper by Robert J. Barro explores whether government bonds are perceived as net wealth by the private sector, which is crucial for understanding the real effects of changes in public debt. Barro examines the effects of finite lives, imperfect private capital markets, government monopoly in providing liquidity services, and uncertainty about future tax obligations on bond values and tax capitalization. In an overlapping-generations model, he finds that finite lives do not affect the capitalization of future tax liabilities as long as there are operative intergenerational transfers. Social security payments and other imposed intergenerational transfers are also analyzed, showing that marginal changes in these schemes have no real effects when current and future generations are connected by a chain of operative transfers. The paper further discusses the impact of imperfect private capital markets, where government debt issue can increase net wealth if the government is more efficient than the private market in carrying out loans. Additionally, the paper examines the role of government monopoly in providing liquidity services, where public debt issue can raise net wealth. Finally, it considers the risk characteristics of government debt and associated tax liabilities, suggesting that uncertainty about future tax obligations can increase household risk and potentially reduce household wealth.The paper by Robert J. Barro explores whether government bonds are perceived as net wealth by the private sector, which is crucial for understanding the real effects of changes in public debt. Barro examines the effects of finite lives, imperfect private capital markets, government monopoly in providing liquidity services, and uncertainty about future tax obligations on bond values and tax capitalization. In an overlapping-generations model, he finds that finite lives do not affect the capitalization of future tax liabilities as long as there are operative intergenerational transfers. Social security payments and other imposed intergenerational transfers are also analyzed, showing that marginal changes in these schemes have no real effects when current and future generations are connected by a chain of operative transfers. The paper further discusses the impact of imperfect private capital markets, where government debt issue can increase net wealth if the government is more efficient than the private market in carrying out loans. Additionally, the paper examines the role of government monopoly in providing liquidity services, where public debt issue can raise net wealth. Finally, it considers the risk characteristics of government debt and associated tax liabilities, suggesting that uncertainty about future tax obligations can increase household risk and potentially reduce household wealth.