Public debt – Banks win, Households lose
Governments sell bonds (via the Debt Management Office DMO) to fund their budget deficits. Bonds are a way for the government to borrow – similar to the government taking out a loan. The Government pays interest to those holding Government bonds.
This is despite the fact that a government also has the ability to create money for the benefit of the public rather than borrowing from the private sector.
“Socialism lives in Britain, but only for the rich: the rules of capitalism are for the rest of us.” – Owen Jones, 2014 Guardian.