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Economics
Crowding Out
When government borrowing pushes up interest rates and makes it harder or more expensive for private businesses to borrow.
Crowding out is one of the main arguments against very large government deficits. However, in recessions many economists believe government spending can actually crowd in private investment by boosting overall demand.
It's like the government taking all the best seats at the restaurant so regular customers have to wait longer or pay more.
Real world: If the government issues huge amounts of bonds to fund spending, it can drive up interest rates. Companies then find it more expensive to borrow for new factories or expansion — private investment gets "crowded out".
💡 Too much government borrowing can make life harder for businesses that want to borrow and grow.