What happens as government debt increases

Question

Quizplus · Accepted Answer

As government debt increases, the government has to pay interest on that debt. This means a larger share of government revenue is spent on interest payments, leaving less money to spend on other things like social programs, infrastructure, and national defense. This can create a vicious cycle where the government takes on more debt to pay for these things, increasing interest payments even further. Ultimately, this can lead to a debt crisis where the government cannot afford to pay its debt or raise taxes to cover it.

What Happens as Government Debt Increases