'Some form of crisis is almost inevitable': The $38 trillion national debt will soon be growing faster than the U.S. economy itself, watchdog warns | Fortune

""If the national debt continues to grow faster than the economy," the report said, "the country could ultimately experience a financial crisis, an inflation crisis, an austerity crisis, a currency crisis, a default crisis, a gradual crisis, or some combination of crises. Any of these would cause massive disruption and substantially reduce living standards for Americans and people across the world.""

""Among the most alarming scenarios detailed is the 'Austerity Crisis.' In this potential future, a loss of market confidence would force lawmakers to enact abrupt, massive spending cuts or tax hikes to quell panic. While deficit reduction is necessary, the CRFB warned that rapid implementation of such austerity measures during a weak economy could trigger the worst economic contraction in nearly a century.""

The Committee for a Responsible Federal Budget states U.S. national debt has reached 100% of GDP and identifies six potential fiscal crises: financial, inflation, austerity, currency, default, and gradual. Debt growing faster than the economy increases risk of market confidence loss and forced abrupt fiscal tightening. Rapid austerity during a weak economy could trigger the worst economic contraction in nearly a century. A fiscal contraction equivalent to 5% of GDP could convert modest growth into roughly a 3% economic shrinkage. Policymakers need a thoughtful pro-growth deficit reduction package to avert severe disruption.

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