What happens when a country has too much debt?

If a country has debt problems, taxes and other fees might be increased greatly to provide the country with some money to finance its operations.

The currency of a country might lose value if its debt grows too big. In such a case, the government might be forced to print more money, and as a result, its currency might go lower.

When a country gets badly in debt, capital might flow out as investors might start believing that the country is no longer a safe place to invest in.

When a debt gets too high for a country to pay, the country might default or fail to pay interest in time. This can lead to a wide array of different problems.

Under such circumstances, a country might be forced to take extreme measures which are usually in the form of loading citizens with more payments.

If a country has a bad economy and a large debt, getting more debt might become a problem. In some cases, that country can get more debt, but with much higher interest rates. (See What is the difference between public debt and external debt?)

When a country develops a serious debt problem, money will usually be directed to basic necessities and so many products might disappear from the market.

As the country’s currency lose value, the standards of living inside the country go lower. This usually happens if the debt is big and the economy is not going well. (See Why do countries devalue their currency?)

In extreme cases, disruptions in basic services such as electricity and water may happen if the country is totally unable to pay for them.

If the standard of living of the citizens is directly impacted as a result of a debt crisis, riots are usually expected to happen.