No one knows the consequences of these unprecedented peacetime deficits, but the CBO has listed some possibilities:

They may further raise interest rates, which would increase deficits, squeeze other federal programs and crowd out borrowing by businesses for factories, machinery, computers and buildings. This last effect could imperil living standards.

Government might find it difficult to respond to national emergencies, whether war, natural disaster or a financial crisis, because more borrowing on top of today’s deficits would be harder.

We could face a full-blown debt crisis. As CBO Director Keith Hall recently testified, “Investors would become unwilling to finance the government’s borrowing unless they were compensated with very high interest rates.” That could trigger draconian spending cuts or tax increases — and a stiff recession.