Investopedia: How Debt Limits A Country's Options

Debt is an evergreen topic in financial writing, whether it involves the perks and perils of individual consumer debt, corporate debt or national debt. While the national debt of the United States has never really ever slipped out of the national dialogue, events over the past decade have intensified the discussion.

Tax cuts, spending on multiple wars and a major recession induced by the collapse of the housing market have combined to spike the U.S. debt burden, while sovereign debt issues have all but blown up the economies of Southern Europe (not to mention the banks, insurance companies and other investors who bought that debt). What's more, debt has started to increasingly factor into bilateral and multilateral political squabbles. While debt is fundamentally necessary to the operation of a national government, it is increasingly clear that debt can be limiting and dangerous.

Please read more here:
http://www.investopedia.com/articles/economics/12/debt-limits-country-options.asp