What was one consequence of the budget and trade deficits during the Reagan era?

During the Reagan era, the U.S. experienced significant budget and trade deficits, which contributed to an increase in the national debt. The combination of substantial tax cuts, increased military spending, and high consumer spending led to higher government borrowing to finance the deficits. As the government borrowed more to address its fiscal needs, the national debt grew substantially during this period. These economic policies, while intended to stimulate growth, ultimately resulted in a larger national debt, signifying a long-term fiscal challenge for the country.

In contrast, options like a reduction in government spending did not occur as spending continued to rise, particularly in defense. The assertion that the U.S. became a creditor nation is also inaccurate, as the trade deficits indicated more imports than exports, further complicating the nation's financial standing. Lastly, while tax burdens may have shifted for various economic classes, the primary consequence associated with the deficits was the escalating national debt.