Once again, when debt gets past a certain level, things get bad. So if we change nothing, we’re looking at painful years of austerity and ultimately insolvency.
Big problems we’re almost certain to face along the way?
We’d likely see increased borrowing costs so we’d be spending trillions of dollars on interest and not on other priorities such as education or transportation. The chart below from the House Budget Committee puts this in perspective; if we do nothing, in ten years we’ll be forced to spend almost ten times as much on interest as on education — which isn’t good for anyone:
Additionally, we’d also likely lose the ability to borrow money because lenders would say forget about it. That would get really ugly really quickly. It would likely mean austerity, high taxes, inflation, and being in a vulnerable spot where if we needed to fund something like a war we might not be able to.
(See this document from the Peterson Foundation for a helpful list of all the bad things that can happen if we don’t address the debt)
One other thing. Some say we can just grow our way or tax our way out of the problem. But that’s a false argument. The costs we’ll face due to exploding entitlement programs will be so great we won’t be able to do that.
Politicians have ignored the problem for decades, but it’s clear we can’t afford to do that any more.