1. If the external sector is in deficit overall and real GDP growth rate is higher than the current real interest rate, then:

Both the private domestic sector and the government sector overall can reduce their respective net debt liabilities.
Either the private domestic sector and the government sector overall can reduce their respective net debt liabilities.
Neither the private domestic sector and the government sector overall can reduce their respective net debt liabilities.

2. The debt of a currency-issuing government with a floating exchange rate is not really a liability because the government can just continuously roll the debt over without ever having to pay it back. This is different to a household, the user of the currency, which not only has to service its debt but also has to repay them at the due date.

3. The fact that large scale quantitative easing conducted by central banks in Japan, the UK, USA and more recently, in Europe has not caused inflation provides a strong refutation of the mainstream Quantity Theory of Money, which claims that growth in the stock of money will be inflationary.