Debt is a priority claim on an asset.
Equity is the residual claim on the remaining value of the asset.
Simply, these are the legal definitions of the two basic types of financial instruments.
Discussion
The implications of this are critical. If there is debt against the asset, the debt gets paid - IN FULL - before equity claims are paid.
In a world saturated in more debt then there is future asset value, there is no equity in that system.
We see this show up in the claims on individuals’ productivity both in explicit taxes (income, property, sales, capital gains, etc.) as well as indirect taxes (inflation). The debt taken out by prior generations and large institutions without personal liability for the payment of the debt now has a priority claim on humanity. It must get paid off first.
Freedom is akin to equity. Anything above and beyond the debt is ours to keep. Unfortunately, because of the legal definition of debt, there is less equity value / freedom in the world today.
We’re all subject to the debt commitments we had no part in making.