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What is government debt?

November 28, 2010


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Government debt is money borrowed by a government. Governments usually issue bonds and other debt securities in order to finance part of their expenditures. These financial instruments are backed by the faith and credit of the issuing government.

In the US, the term is also used to describe the debt of a municipal or local government. Bonds issued by states and local governments are referred to as municipals.

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