The present paper develops a simple theoretical setup to examine the role of the tax-spending
mix of fiscal adjustments on aggregate (in)stability in indebted economies. To this end, we
build an AK endogenous growth model with public debt dynamics. If the adjustment of the
government's budget constraint is based on a single instrument (taxes or public spending), the
economy converges towards a high-growth path. With mixed adjustment, however, another
equilibrium appears (the no-growth path) that can be locally over-determined (unstable) or
under-determined (stable). A hopf bifurcation can occur at the border between the last two
cases, which leads to cyclical dynamics. We also show that global indeterminacy is likely to
emerge if fiscal adjustment is mainly based on public spending. A calibration of the model
shows that the area of indeterminacy covers reasonable values for parameters.