Why can governments borrow so much money? | Nerds on Money

Ontario is hundreds of billions of dollars in debt. That's bad, right? You've probably heard it before: if people spent like governments, they'd be bankrupt.

That's true, but it ignores fundamental differences between household and government debt. There are lots of reasons why governments can (and often should) borrow more than you. For one thing, countries can literally print money using the central bank. You can't do that. Provincial governments such as Doug Ford's can also lean on the fact that its finances exist in a much longer timeframe than a human life.

That's not to say there are no consequences to unrestrained borrowing: governments have to be wary of driving inflation or saddling future generations with an unsustainable debt burden.

Join TVO Today's Kat Eschner as she walks you through the convoluted world of borrowing money — and explains why these huge numbers aren't always a big deal.

0:00 What's the difference between government and personal debt?
0:15 How length of life can affect government and personal debt
0:27 How ability to raise money can affect government and personal debt
0:53 How the size of institution can affect government and personal debt
1:26 The risk of governments taking on too much debt