Why is high public debt a concern for a government?

High public debt is a concern for a government primarily because it reduces the ability to borrow in the future. When a government accumulates a substantial amount of debt, it may signal to investors and lenders that there is a higher risk associated with lending additional funds. This is often due to concerns about the government's fiscal sustainability and its ability to service existing debt obligations.

As the debt level rises, creditors may demand higher interest rates to compensate for the perceived risk, making future borrowing costs more expensive. In extreme cases, if the debt reaches unsustainable levels, a government may face difficulty in accessing financial markets altogether. This can lead to a vicious cycle where the government is unable to finance necessary expenditures or investments, ultimately hindering economic growth.

On the other hand, high public debt does not stand as a sign of efficient government spending. Instead, it may arise from either deficit spending that has not yielded proportional economic benefits or from rising costs that outstrip revenues. It is also inaccurate to say that high public debt increases domestic investment; if anything, it can crowd out private investment as higher government borrowing might lead to higher interest rates. Lastly, claiming that high public debt has no impact on economic stability overlooks the potential for it to create financial strain, influence inflation rates,