On the Road to Fiscal Ruin

In The Sun Also Rises, when one of Hemmingway’s characters was asked how he went bankrupt, he replied “first gradually and then suddenly”. As 30-year US bond yields climb to their highest level since 2007 in response to the country’s unsustainable public finances, we must ask whether something similar might soon be said of the United States. Presently the US seems to be going bankrupt gradually, and it would seem to be only a matter of time before it goes bankrupt suddenly.