True or False?
The correct answer is false. The loan is not from the government. Rather, it is from the people who buy the government debt to those who choose not to purchase government bonds. The people who do not purchase bonds pay to the government interest that will ultimately be received by those who have purchased the public debt. Any individual can remain in a neutral position (being neither a borrower nor a lender) by purchasing sufficient government bonds to yield interest earnings equal to his share of the future taxes that will be levied to pay the interest on the government debt.