Is there a potential problem if governments continually finance goods and services by borrowing money ? A.Yes, it is unconstitutional for governments to borrow money , Yes, eventually their debts must be repaid with interest.

Question

rane · Answer

ofcourse there is...  by doing this government is increasing their debts which will lead to high cost and prices for imports and good and services

anonymous · Answer

A particular government will continue to borrow money despite of how high their debt already is because the government cannot cover some cost in a particular budget say for a department in that government. It may have an impact on the government itself because they will eventually pay the debts plus the interest and that burden will be passed on to the citizens. But as far as i know, they will also invest that borrowed money for some higher returns.