[Danzig]

more from the link above, but i hope anyone interested in this issue will read over the whole paper:


Long-term budget projections require a stable economic backdrop. For these projections, CBO assumed that even a large increase in federal debt would not affect economic growth or real rates of interest after the first 10 years.3 However, if debt actually increased as projected under either scenario, interest rates would be higher than otherwise and economic growth would be slower. The rising debt would reduce the size of the domestic capital stock (businesses’ equipment and structures as well as housing) and decrease U.S. ownership of assets in other countries while increasing foreign ownership of assets in the United States. Those changes would slow the growth of gross national product (GNP) and, as the debt burden rose, could eventually lead to a decline in economic output.4 The effects would be most striking under the alternative fiscal scenario. In CBO’s estimation, the increase in debt under that scenario would reduce the capital stock by more than 20 percent and real GNP by 9 percent in 2035, compared with the levels that would occur if the debt remained roughly at its current size relative to the economy. Under the extended-baseline scenario, federal debt would be less threatening in the near term but would lead to significant economic harm in the long run. Those economic effects mean that actual fiscal pressures under current laws and policies would be even greater than CBO’s long-term budget projections suggest, because slower growth would limit revenues and a smaller capital stock would imply higher interest rates on government debt and other financial instruments.

Holding down the spiraling levels of debt projected under either scenario could therefore result in significant economic benefits. However, accomplishing that goal would require some combination of substantial revenue increases and substantial spending decreases relative to current law. Those changes would have their own economic and social costs.

~again, this was from '09-so now the situation is even more dire, as we're two years past the point, the tax breaks didn't expire, and we're two years further into a sick economy.