Given the nature of the present financial system in the US government, it is difficult to see any change in the level of debt. We can not afford to fund all of the desired goods. The Democrats, and perhaps common sense require us to fund the welfare system. The government share of the total income of the lowest one fifth of the income population is such that the sudden removal of such assistance would at best lead to massive unrest. That group is almost totally dependent on the government for their basic needs. Are Transfers Replacing Work For America' Poor?<!-- --> | ZeroHedge Another major source of expenditures is payment on the debt. Non payment of that would lead to a quick collapse of the monetary system. It is hard to borrow more money if you are not paying interest on that which you have already borrowed. Then there is Medicaid and Social Security. Many if not most of the elderly can not survive without those benefits and after paying into them for 45 to up to 70 years have a sense that they are owed that money rather than it being a "gift" from the government. Then there is the money for national defense. While we may argue that it is not being spent wisely, there is in fact a need for it. The world out there is not a polite place and we do need to protect ourselves. These and other reasons indicate that it would be very difficult to cut expenditures enough to make any real change. By the same token we are raising about all the money we can with the present tax system. While we could create a value added sales tax that would raise additional money, it might be the last straw that breaks the system. Thus the most likely outcome is to continue to kick the can down the road as long as possible. The following post goes into that option. The Endgame of Fiat Money - The Philosophical Salon We are reaching the point where there are ever fewer options and ever increasing disagreement on using any of those options.
I actually don't believe that US dollar will lose it's global reserve status even during my children's lifetime. The dollar can continue down for decades.
What we need to do is get rid of all of the bloat. Why do we (the government) give money to charities? Why does the government support the arts? Almost 50 years ago I took a political science class. In PolySci 101, I learned that "The purpose of government is to provide those things for the people that the people cannot provide for themselves." Security, infrastructure? Yep, yep. Education? No, government hasn't done a very good job with that one. In our present situation, maintain certain programs, such as Social Security, which as pointed out above, many people paid in to all of their working lives. Yes. But get the government, at all levels, out of non-government areas.
