How does the government get the money to spend when running a deficit?

When the government runs a deficit, it becomes hard to borrow funds since the credit rating is low.

If the government needs money but runs a budget deficit, it can sell government bonds to investors to generate funds. Government bonds refer to debt securities used by the government to raise money to sponsor its operation. Bonds pay a fixed interest rate upon maturity, and they do not depend on the credit rating of the organization selling the bonds. The value of the bonds declines when the economy is growing and increase when the economy is declining. Thus, the government can use bonds to generate funds instead of borrowing when running a deficit.