INTHEBLACK April/May 2024 - Magazine - Page 40
F E AT U R E
Governments typically
borrow money through
the global bond market.
The pandemic made it
necessary for governments
to borrow on a much larger
scale than in the past.
This is a complex issue,
because government debt
can take a long time to
pay back.
Government
borrowing
explained
Record-high levels of government debt have come under
increasing scrutiny since the end of pandemic-related
spending programs, so how much government debt
is too much?
Words Gary Anders
As the pandemic swept across the
planet in 2020, at its heels was a tidal
wave of public sector spending.
In many respects, the accumulation
of a colossal global debt was inevitable.
To combat the pandemic on a health
response level and simultaneously fund
financial relief packages required to
support affected businesses and households,
governments around the world needed to
borrow money on a massive scale.
40 INTHEBLACK April/May 2024
SOURCES OF FINANCING
Governments often go to the
global bond market to borrow funds.
Most governments issue fixed income
debt securities via the bond market
on an ongoing basis.
During the pandemic, however,
governments needed to borrow on
a scale most countries have never
seen. They have largely done this
by issuing tens of trillions of dollars
