Not that much more complicated - but perhaps that's because you're over-simplifying the case of a household spending more than it earns. As with a household, wh

Not that much more complicated - but perhaps that's because you're over-simplifying the case of a household spending more than it earns. As with a household, when spending exceeds income the government has to take out a loan (usually by issuing government bonds). That loan has to be paid back with interest, and so it only makes sense when you are paying for soemthing now that will save you more money in future than you would pay in interest. The main differences are quantitative - effectively the (US) government has an insanely high credit score, and so many people are willing to lend them money (buy bonds). If a household misses payments on a loan, it will worsen their credit score. Likewise, if the government prints more money to make the interest payments on bonds more manageable, then it also dis-incentivises entities from investing in those bonds in future. In both cases future borrowing will be at a higher interest rate. edit: Also, that's tax-payer money that's being spent paying off the interest on outstanding bonds, which could have instead been spent on healthcare or infrastructure.