* Servant Corps sighs.
Let see if I can lay out the Deficit Hawks' view effectively. As far as I remember, the National Debt causes two problems:
1) Government, in order to attract investors, may decide to raise interest rates, which will affect economic growth negatively. There is also a crowding-out effect on businesses, as more people will loan to the government rather than to businesses. Businesses gain less capital as a result.
2) There is an incentive for the United States to inflate or "monetaize" the debt, meaning the US Dollar will lose value and inflation will increase.
Now, I admit there has been problems. Despite rapid spending in the Obama era, there is no change in bond yields, suggesing people are still buying bonds. At the same time though, Obama is selling more inflation-tied bonds and reassuring China and other countries that the national debt will go down. We'll see if the deficit hawks are right or not soon.
Deficit Hawks worry specifically about entitlement spending, which will ballon with the retirement of baby boomers. This means an increase of Social Security spending and a corrospending reduction of income. The debt simulator I programmed in LCS does not simulate this entitlement spending dynamic effectively.
The fact remains though, deifict hawkism is not as "sexy" as health care or abortion, so that's why a "default" mechanism would be necessary, to get the LCS to pay attention to this. Lower economic growth doesn't really seem to..."help" in that regard.