By bizn_fun 
Setting out his party’s proposal, Sir Ed said: “Now is the moment to be clear-eyed about the threats facing Britain – Vladimir Putin is waging war in Europe while Donald Trump is tearing up the rules and alliances that keep us safe.
He said Britain and its allies “must rapidly strengthen our defences to deter the likes of Putin… it is much better to invest now in deterring a war than having to fight one”.
The Liberal Democrats said the money raised from issuing bonds would be ring-fenced for defence and the investment would help deliver “growth, jobs and higher revenues” for the government “which would partially offset the cost of additional debt servicing”.
The party added the scheme would need to be accompanied by an overhaul of the Ministry of Defence procurement process, which has previously been criticised as wasteful.
Their proposal, the party says, would be similar to the bonds scheme used during World War One and World War Two.
Individual citizens could lend the government money, which would be paid back in six to 10 years with interest. By the end of 1945, the scheme had raised £1.754m.
Posters encouraging members of the public to buy bonds – or national savings certificates – used slogans including “lend to defend” and “feed the guns with war bonds”.
Dan Coatsworth, head of markets at investors AJ Bell, said: “War bonds are a proven way of raising money to fund national defence spending, but they can burden a government with long-term debt.
“In theory, the public might demand a better rate of interest than they could get on cash in the bank to take up the bonds.
“While some people might think it is their duty to support the country, there will be others who treat such a bond in the same way as any type of investment.”