Repayment of Government borrowings.

If memory serves me right in the past when government borrowed money from ordinary people a sinking fund was set up to set aside funds which would clear the Loan on its maturity. It would appear that all is done now is to pay the interest on the loan and hope that on maturity either the loan will be extended or some new lender will emerge. Seems a bit risky way of doing business so my understanding must be incorrect in some way.

dewdrop said:

If memory serves me right in the past when government borrowed money from ordinary people a sinking fund was set up to set aside funds which would clear the Loan on its maturity. .

Click to expand...

I don't think your memory serves you correctly. It would make little point for the government to save money with which to repay borrowings. The government is and probably always has been a big net borrower.