Perhaps it will be resolved through a downgrading of the USG credit rating. That is an expected consequence of quantitative easing if other countries do it.

Then we will have devaluation of the dollar, inflation, unemployment increases, and a generally lower standard of living.

I think that a shock is needed to jerk everyone out of the political rhetoric and to start making real inroads on the debt. This is a very serious matter that has not yet been taken seriously by enough citizens.

This situation will correct itself. It is only a question of how many of us will be left standing at the end. Through good government we can only modulate the correction and perhaps ease the pain in some areas by inflicting more on those with a good buffer.

In most cases the wealthy have become that way through benefiting more from the bad governments of the past, so it is fair that they should pay more taxes now to help dig us out of the hole.

Perhaps we need to impose a big Goods and Services Tax (say 15% on everything) until the crisis is over. That way those who have the money to spend will pay a higher share of tax. That would be too tough on those who have to spend most of their income on food and rent, so we would need to find some way to compensate fort that.

It will not be resolved. We will almost certainly avoid the situation at the last minute by Democrats and Republicans passing some sort of comprimise to raise the debt ceiling. But then they will continue to do exactly what they are doing now until it comes time to raise it again.

What we need: (IMHO)

Cut spending:
There are good government programs, to be sure, but

• Why are we sending aid to so many countries when we are in debt?
• Why do we subsidise industries?
• Why are U.S. Soldiers in so many countries around the world without Letters of Marque or Declaration of War?
• Why do we continue social programs (no child left behind, etc) that don’t do anything?

Not every government dollar spend is good, no matter what Democrats say. Even some useful programs may need to be cut.

Raise Taxes:
If Republicans think we can just trim some programs and solve this problem that both they and the Democrats have caused (with our idiotic approval via votes), then they need a math refresher. Let’s do some simple napkin math.

We owe: $14,000,000,000,000
Say We Cut: $28,000,000,000 out of the budget every year.
It takes: 500 years to pay off the debt.

Reality Check:
FY2010 Budget: $3,500,000,000 (Mandatory and Discretional)

So cut it all:
If we cut the entire budget of 3.5B, it would take 4,000 years.

Looks like we need more money.

Let’s just tax the crap out of the evil rich! 100%!! Get those bastards!! Take it all!!!

What do we do next year when they are poor?

Tax everyone. Even (shudder) me.
Cut spending. Even (shudder) the ones I like.

The party was fun. Time to grow up, face the hangover, and start cleaning the puke off of the floor.

GWD, climbing off the soapbox.

The debt situation is a symptom of a larger problem. Why is it that the US Government still has not figured out what the actual cause of the problem is? It seems so simple.