'America's Deficit Reckoning': How the U.S. debt spiral could spark a crisis

Independent analyses — by sources ranging from Yale University to the Wharton School to the Congressional Budget Office – have each said that President Donald Trump's budget plan will add trillions of dollars to the U

Deficit over the next 10 years

What's at stake if the deficit continues on its upward trajectory

And un past spikes, the current one isn't driven by war or economic crisis, leading many to raise concerns why America might be playing with fire when it comes to its fiscal health

CNBC's "America's Deficit Reckoning" explores the consequences — not how to solve the budget deficit, but what's at stake if we don't

Watch the to learn more

Through interviews with more than a dozen top officials, economists and investors, including former Treasury Secretary Robert Rubin, macro investor Ray Dalio, and former Chairman of the Joint Chiefs of Staff Mike Mullen, CNBC d in on three potential areas of fallout: the, the economy and international relations

At risk: Persistent deficits have many minent investors on high alert

Is showing "classic signs" of a late-stage debt cycle, ascribing a 50% chance of trauma in the next three years

PIMCO's Chief Investment Officer Dan Ivascyn was a bit more sanguine, saying that he thinks a crisis of investor confidence is unly in the U

But has been diversifying away from Treasuries

That mirrors some recent activity in the bond market, which hasn't been overtly reacting to the new budget plan

Still, the bond vigilantes will police the deficit when they feel it's necessary: Ed Yardeni, who coined the term in the early '80s, said they're more powerful than ever

Economic strain: If Americans benefit from policies such as tax cuts and higher spending, why should they care the longer-term implications of wider deficits

The most apparent risk to the economy is inflation, which would keep interest rates higher and "crowd out" private investment

Additionally, when interest payments become a higher portion of federal outlays, they drain resources that would otherwise go to other budget line items, says Maya MacGuineas of the Committee for a Responsible Federal Budget

And it hinders the government's ability to respond in the event of an emergency

But some of the worst economic effects will be felt by future generations, who, according to one Gen Zer interviewed by CNBC, are already concerned the deficit will impede their ability to collect social services

International implications: Admiral Michael Mullen, former chairman of the Joint Chiefs of Staff, once called the national debt the "greatest threat to national security. " His concern was that as debt levels increase and rates remain higher, it could squeeze discretionary defense spending

As historian Niall Ferguson warns: A great power that spends more on interest payments than defense breaches a threshold that historically has preceded a decline

Crossed that red line last year

There's also a significant interdependence between the U

And its foreign creditors, especially China and Japan, so if global investors begin to truly question America's fiscal health, the ripple effects could extend beyond the bond

The clock is ticking: Experts at the Penn Wharton Budget Model estimate the U

Has less than 20 years to fix its fiscal trajectory

After that, even aggressive tax hikes or spending cuts may not be enough to stave off default — implicit or otherwise

Can nically its way out of debt, doing so risks runaway inflation, economic contraction, and geopolitical fallout

As Rubin put it, we may be entering uncharted territory

The time to prepare is now — before force our hand

Dive deeper with the podcast here.