Last month, the Penn Wharton Budget Model from the University of Pennsylvania came out with an analysis of the debt crisis entitled “When Does Federal Debt Reach Unsustainable Levels?”Their answer? The concern is that punting the problem into the future, continuing to raise debt even as interest rates rise further or hold at higher levels for longer, the debt will grow even faster in a “snowball” scenario. Similar proposals have been offered over the years but at the same time they seem to lack political support – indeed, Republicans have recently voiced the idea of cutting Social Security. The debt crisis is rapidly worsening at a time when the bond market is having its own set of problems. A recent government auction of debt, an occurrence that is becoming more common as the U.S. borrows more, saw weak demand.

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