Could the National Debt be too small?

Debt payoff chart

Life After Debt a secret government report from 2000 on the “crisis” that might occur if the US paid off it’s debt.

A very interesting story with comment from a Clinton era economist on the situation after that term had ended.
http://www.npr.org/blogs/money/2011/10/21/141510617/what-if-we-paid-off-the-debt-the-secret-government-report

Could it really be bad to pay off the debt or does this just highlight a problem with economic onion layers?