explain the real effects of excessive national debt on the nation's economy?

Question

Could somebody please explain me this?

Answer 1

The meaning of "excessive" will always be debatable, but the conventional explanation would be that as debt becomes excessive,
1) the gov't would have to raise taxes to continue paying interest on the debt,
2) the national currency would probably lose some of its value,
3) inflation would increase
4) Interest rates would rise for several reasons

In the real world this theory does not always prove correct. See Japan since the early 1990s -- their government debt is outrageously high, as they've run enormous deficits for many years (both far worse than anything the US has ever experienced). But despite that they've suffered deflation (not inflation) and interest rates fell to zero.

Mike T -- I love your analogy that money is like an electric current. I thought I invented that analogy!

Answer 2

Is it national debt? Is it the nation's economy? You have to spend money to make money. Some mistakes are made along the way, but for the most part the money is just like an electrical current. It is a way to transport power. This concept will help me describe the answer to your question. The real effects of excessive national debt are multidimensional on the nation's economy. There is no simple answer. But one point I can make is about the importance of good connections or relations to other national economies like China, Russia, Canada, etc.