If debt keeps growing at its current clip, a crisis is inevitable. But it isn’t too late.
The consequences of a debt-induced financial crisis would be dire, and government officials would be wise to reduce the risk of such a crisis occurring. Stabilizing the burden of federal debt on the economy is a feasible, responsible target, and lawmakers should move toward it as fast as possible.
The stakes are enormous. Foreign governments and investors already are diversifying their portfolios away from the U.S. dollar and stocks.