Chapter 4 | Page 152 4.2.3 Debt and deficit financing Debt and deficit financing allows States to supplement resources that are raised through tax and non-tax measures. By running a budget deficit which is financed through borrowing or printing money, deficit financing allows governments to spend in excess of total revenue. Common forms of debt instruments include loans from other countries, international financial institutions and commercial banks, as well as other financial instruments such as bonds. The main consideration in public sector borrowing and deficit finance is that, while achieving a balanced budget is an important long-term policy goal, the need to address current shortfalls in revenue makes borrowing a crucial policy tool. The economic benefits and risks associated with public sector debt have attracted significant scholarly debate. Progressive and heterodox economists in particular argue for larger budgets with high levels of revenue and expenditure and advocate budget deficits in periods of economic down-turn to maintain full employment.56 The challenge is to develop a more concrete understanding of the trade-offs involved in situations where ESC rights obligations and international debt servicing obligations are often in conflict.57 Treasury bills (T-bills) and bonds are among the most common of sovereign debt instruments; these can be either general obligation or revenue bonds.58 The global bond market is enormous, with an outstanding value estimated at US$100 trillion in 2012.59 Bonds may be short-term, often a few months, or long-term of many years; both the period of borrowing and the interest rate are specified.60 The government is required to pay the bond-holder the principal 56 Radhika Balakrishnan, Diane Elson and Raj Patel, 'Rethinking Macro Economic Strategies from a Human Rights Perspective' (2010) 53(1) Development 27-36, 33. 57 Sabine Michalowski, 'Sovereign Debt and Social Rights - Legal Reflections on a Difficult Relationship' (2008) 8 Human Rights Law Review 35-68. 58 Treasury bills are short-term obligations issued with a term of one year or less and sold at a discount, and does not carry an interest before maturity, while bonds are long-term securities that have a stated interest rate that is paid semi-annually until maturity. 59 See Mary Dowell-Jones, 'Financial Institutions and Human Rights' (2013) 13(3) Human Rights Law Review 423-468. 60 Balakrishnan et al, above n 53, 15.