I don't think this qualifies as a "high debt situation" at this point... the price feed is showing a debt ratio of 4.73% because it is using a discount. if it was not using the discount, it would be reporting 4.26%.
That's on the high side of manageable.
It may soon move down, though... your most recent price feed update would register a debt ratio of 3.06% ... or 2.71% if you were not discounting.
I'm pretty sure that we have different thresholds for what we consider high debt... But if the sbd_print_rate is non-zero, I'm fairly sure we're not in a situation like the example from the white paper. It defines high debt (beyond which interest payments should be discontinued) at 10%... and I think currently 5% is more appropriate (beyond which sbd rewards are discontinued)... but, we're significantly below 5%.
But, setting that aside... I have a much more substantive problem with how you conceive of the discount and its effects. I am very concerned with what seems to be your embrace of a permanent discount and your movement to reduce the interest on SBD.
The discount is intended to be used in the case of SBD trading below $1 (when debt is high... when it is not high, the interest rate should be raised instead, according to the part of the white paper you cite). This is intended to increase demand for SBD. The underlying logic is that if people aren't willing to pay $1, it is because they determine that they won't get their $1 back... so you offer them more steem upon conversion so that they are assured they won't lose money.
This is only necessary when the market is anticipating a decline in the price of Steem. When the market expects some measure of stability, the $1 of steem produced from an unadulterated price feed would provide the same value proposition that you're attempting to reproduce with your discount.
Really, when you apply the discount you are just trying to increase the real value of SBD to $1, when the blockchain wouldn't otherwise provide $1 worth of value.
The discount is pushing the market price of SBD above $1, because the market is anticipating relative stability in the steem price. The real value of the SBD, given the discount, is significantly more than $1. If people are buying SBD at $1.03, it is because they are confident that they won't lose money (and I think since they are paying a premium, they likely expect to make money... given how the market has been over the past 2 weeks, I'd say it's a reasonable expectation)
The correct thing to do at this point in time is to start reducing the discount until SBD is no longer above $1. Unless the market starts trending down again, I'd expect parity to be achieved with no discount. But only after removing the discount entirely, if SBD is somehow still trading above $1, consider reducing interest.
Reducing the interest while applying the discount will only damage SBD and the platform. Continuing to discount under the current (2 weeks) market will guarantee a sbd price over $1, because that's a fair market price. Eliminating interest will just make SBD useless for any purpose other than converting while you can still get well over $1 for it...
I wouldn't be so casual about suggesting SBD should be eliminated, because I actually agree that the success of the platform hinges in large part on the viability of sbd as a stable currency that people can have confidence in... whether it is your intent or not, I think the course of action you are suggesting (effectively permanent discounts and eliminating interest) puts that at risk in a very real way.