If a country's net public debt is $6 trillion and paid off entirely through taxes, which statement is true regarding disposable income?

When a country pays off its net public debt of $6 trillion entirely through taxes, disposable income of individuals and firms is impacted significantly.

If the government collects this amount in taxes, individuals and firms that do not own any of the debt will face a higher tax burden. Consequently, these taxpayers will have less disposable income available to them after taxes. On the other hand, individuals and firms that own a significant portion of the debt would likely benefit from the income generated through the repayment, as they receive interest payments on that debt. If taxes are used to pay down the debt, the pressure on interest rates may lessen in the long run, which would further enhance disposable income for these holders of the debt since they would have more funds available for consumption or investment.

Thus, both statements can be seen as correct in their respective contexts. A decrease in disposable income occurs for those not holding the debt, while an increase is seen for those who do own it, leading to the conclusion that both statements are indeed true. This illustrates the different impacts of public debt repayment on various segments of the economy.