As the US debt ceiling was quickly raised to $12.4 billion to prevent Federal government shutdown, the only inevitable response will be an even larger increase early next year.

The United States balance sheet is looking like a weaker and weaker attempt at recovery. Some might even make the argument that the US is insolvent, unable to pay back its debts.

What does all this mean?

This issue has long been at the attention of fringe economic commentators but as it has begun to enter the mainstream, I’m becoming more concerned. This week saw more attention to the issue with two fantastic podcasts on the US Federal Deficit which are absolutely crucial for understanding an approaching crisis.

NPR Talk of the Nation, Samuelson Warns U.S. Could Go Broke

EconTalk, Hamilton on Debt, Default, and Oil

James Hamilton of the University of California, San Diego, and blogger at EconBrowser talks with EconTalk host Russ Roberts about the rising levels of the national debt and the growing Federal budget deficit. What is the possibility of an actual default, or an implicit default where the government prints money to meet its obligations and causes inflation? What might signal an impending default? And what is the long-range forecast for the U.S. government’s obligations? Later in the conversation, the subject turns to oil prices, an area of Hamilton’s research. Hamilton explores the causes of the increasing price of oil over the last decade and the implications for the economy.