* Federal spending on interest payments on that debt would increase substantially, especially because interest rates are projected to rise over the next few years.
* Because federal borrowing reduces total saving in the economy over time, the nation’s capital stock would ultimately be smaller, and productivity and total wages would be lower.
* Lawmakers would have less flexibility to use tax and spending policies to respond to unexpected challenges.
* The likelihood of a fiscal crisis in the United States would increase. There would be a greater risk that investors would become unwilling to finance the government’s borrowing unless they were compensated with very high interest rates; if that happened, interest rates on federal debt would rise suddenly and sharply.
