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Here’s where U.S. debt may become unsustainable with interest payments triggering a default crisis that even steep tax hikes can’t fix

  • A Penn Wharton study says U.S. federal debt becomes effectively unsustainable above about 210% of GDP — today it’s roughly 100% and could climb far higher over time.
  • That tipping point could still be decades away under some forecasts, but rising healthcare costs, higher interest rates, or reduced foreign demand for Treasuries could bring it forward (estimates range roughly 14–25 years).
  • Fixing it would be politically painful — the report estimates something like a permanent ~15‑percentage‑point tax increase on labor or big benefit reforms, and a bond‑market shock might force lawmakers to act sooner.
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