Question

Is there a potential problem if governments continually finance goods and services by borrowing money?

Answer 1

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.