If I understand the equations correctly, the high interest rate is the thing that creates more debt. The Ausbit page says that the current HBD market cap is $9,078,966. I've read other pages saying the witnesses want 5 million in HBD savings.
The 20% interest on 5 million HBD will create 1 million of debt in the first year.
As I understand, the debt limit simply lowers the price when the HBD haircut kicks in. The ausbit page says it currently kicks in at $0.2234 . HIVE is at $.85 right now.
It is conceivable that HIVE could dip to $0.22. It was there last year.
Tripling the debt limit should divide the haircut price by three; so the haircut would kick in at $0.75.
It is likely that HBD holders will convert their HBD to HIVE if there is a huge price drop. So, I don't think the debt limit will come into play for the next couple of years.
Anyway, the damage is being done by the high interest rate, not by the debt limit.
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The witnesses cant set what will be the amount in the savings it is up to users how much they will put in. Leofinance put a goal of their own to have 5M in HBD liquidity in their USDC-pHBD pool on Polycub. This is totally different from HBD in savings.
Yes, at the moment there is around 3M HBD in savings. For context ... at the moment there is around 26M HIVE equivalent printed per year, or around 2.2M per month ...