Where does government debt come from?

Government debt arises as a result of the issue of government bonds.
Government bonds are issued by a country in order to finance investments without raising taxes. In principle, that's a smart idea, if you think about it.

That's how it works (simple case): Government issues bonds at 95$ today promising it will buy them back the following year at 100$. The difference between the two numbers (100-95=5$) is the interest, which, if divided by the issue price, reveals the interest rate (5/95=5,26%).

Everyone can buy government bonds: banks, companies, but also ordinary people like you and I.
Bond subscribers therefore lend money to the state and become creditors. Government, on the opposite, contracts a debt that must be paid for in due time.

Why this economic crisis then?

The reason behind the crisis we are all enduring today is essentially one: debt. In particular, government debt.

In the past, economists like John M. Keynes promoted the idea that governments should encourage private investments during economic slumps in order to avoid recessions.
How?
By giving companies generous loans at cheap interest, that is, cheap price, which can be paid back once the economic slump is over.

At a first glance, there seems to be no danger at all in this procedure. History, however, has proved the opposite.