A case in point is when a government runs up a succession of very large deficits and ends up accumulating an excessive stock of national debt.
At the limit, this may even lead to a dislocation of inflation expectations, as financial markets start to expect that part of the national debt will be simply “inflated away” – that is, it will be eroded via higher inflation 18 – with a resulting increase in interest rates. By definition, preventing a dangerous build-up of national debt requires keeping budget deficits under control.