We explain low interest rates of government bonds relative to the growth rate by providing a dynamic stochastic general equilibrium (DSGE) model of a production economy featuring intermediation costs and heterogeneous access to production among agents. We investigate fiscal sustainability by testing whether the expected debt-to-GDP ratio stabilizes or increases without bound. We update the future fiscal variables by specifying a fiscal rule that incorporates Obama's plan and the observed correlation between the primary surplus-to-GDP ratio and the GDP growth rate, and simulate the debt-to-GDP ratio. We report that the fiscal policy of the US is not sustainable in the sense that the debt-to-GDP ratio will increase without bound with a probability greater than 50 percent.