These are the tools that fight an overheated economy. Fiscal policy dominates, so real GDP grows and inflation occurs. This policy will cause AS to shift right. I.e., lowering the costs of businesses. It uses up funds that would go to investment.
Government borrowing is an added demand to borrow.
In the credit market, an increase in demand raises the price of money. Added government borrowing relies increasingly on foreign-owned funds. Each year s deficit increases the national debt. Money used for interest payments cannot be used for other programs. The national debt is the sum of all outstanding debt incurred by the United States.