Crisis escalation
Boccia and Lett, 23 (2/1/2023; Romina Boccia is director of budget and entitlement policy at the Cato Institute, where she specializes in federal spending, budget process, economic implications of rising debt, and Social Security and Medicare reform, MA in Economics from George Mason University, Dominik Lett is a Research Associate at the Cato Institute, BA in Political Science from Wichita State University; “The Debt Limit and the High Costs of Debt”; Cato Institute; https://www.cato.org/blog/debt-limit-high-costs-debt) //LVL
Increased vulnerability to crises. A large debt burden also constrains the U.S. government’s ability to respond to domestic and international crises. CBO explains:
“Having a small amount of debt outstanding gives policymakers the ability to borrow to address significant unexpected events such as recessions, financial crises, and wars. A large amount of debt, however, leaves less flexibility for government actions to address financial and economic crises, which, in many countries, have been very costly to the government (as well as to residents). A large amount of debt could also harm national security by constraining military spending in times of crisis or limiting the ability to prepare for a crisis.”
Recent federal spending sprees, including the $6 trillion Congress spent to respond to the COVID-19 pandemic, would be considerably more difficult, if not impossible, under the current trajectory. Rising debt weakens economic resiliency by making it harder to respond to economic shocks and harms national security and public health by constraining our capacity to respond to and prepare for emergencies.