government borrowing and debt repayment

when the government spends more than it raises in taxation ,it has to find the money from somewhere . it borrows it ,from those pepole who buy national savings certificates or premium bonds or put money in the National savings bank , and also from pension funds and life assurance companies that buy government securities-called 'gilts - on the stock exchange ' gilts is short for gilt -edged meaning they are of the highest quality ,with no risk of interest not being paid or of default on repayment of the original loan . let us see what happens when somebody buys $100 of premium bonds , or apension fund buys $10 of gilt-edged securities from the govrenment.
the purchaser of the premium bonds pays $100 in cash or by cheque over the counter of apost office . his or her bank deposits fall by $100 -as does the money supply - and the government is holding of money (which are excluded from the money supply ) rise by $100. so ,money supply has fallen .
it is much the same with apension fund ,only the amounts involved are far larger . the pension fund buys the gilts from the government with a$10m cheque drawn on its bank account ;it is credit balance falls , as does the money supply . the government is balance at the bank of england rises by $10m , but the money supply does not increase ,because of the definition stated above .
therefore ,we can say that if the government borrows money from the general public , businesses and financial institutions ,this has acontractionary effect on the money supply ,in the same way as when taxes are collected .