Too embarrassed to ask: what is a sovereign bond?

Government spending is funded in two ways – taxation and borrowing. When a government borrows money, it issues an IOU called a sovereign bond.

Too Embarrassed to Ask: what is a sovereign bond? - YouTube Too Embarrassed to Ask: what is a sovereign bond? - YouTube
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Government spending is funded in two ways. One is taxation. We all pay taxes to pay for public services such as healthcare and to fund benefits such as the state pension. But government spending often exceeds the amount of tax raised in any given year. So the government plugs the gap by borrowing the money.

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