Usually the government doesn’t borrow from banks. Instead it borrows from ‘the markets’ – mainly pension funds and insurance companies. This process means that government borrowing does not lead to money creation, unless the government borrows from banks (as with some ‘private finance initiatives’). For a full explanation of issues around the national debt, see What about the National Debt?
Ben Dyson was Positive Money's Head of Research until December 2016. He is a co-author of Modernising Money: why our monetary system is broken, and how it can be fixed. Ben's research focuses on potential reforms to monetary policy, structural reforms to the banking system, and the potential for technology to disrupt the payment and banking systems.