Government debt is financed by investors putting money in government bonds. These are usually considered a safe haven with a certain yield over a given period.
The trouble is currently interest rates are much higher than a few years ago, so governments have to pay a large amount of their budget on servicing this debt as is the case in the USA and UK.
The danger is foreign investors think twice about buying this debt in the future.
At the moment the US $ is the world's reserve currency. For how much longer?
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