The thing is, this is all about public debt, not private debt. It isnt about small houses and smaller/fewer cars, it is about less money for schools/ national parks/ transportation/ police/ Military/ poor ‘social safty nets’. We have three options, Default, pay it back, or inflate it away.

#1) most people would consider default to not be an option. It would play havic with the world financial order.

#2) to pay back our debt will require higher taxes, and/or lower spending. This is the bitch of the Keyenian economic model we are now following. We fill in the economic vallies only by lopping off the economic mountain tops. If things are getting better as supposed, then taxes are going up, your benifits are falling, and services will be reduced to pay for all this stimulus.

I think that is what this article was trying to get at.
“No reasonably foreseeable rate of economic growth would overcome this structural deficit. Thus, any efforts to rein in future deficits must entail either large increases in taxes to support these programs or major restraints on their growth — or some combination of the two.”

Basically the American people will get less for their money from the government, or will give more money to the government for what they already get.

#3) Inflate away the costs. IMO, this is what will happen. High inflation will make paying these debts easier and easier. It will play havoc on our economy, and our savers will loose alot of (real) money, but that is prefered to #1 or #2. Print, dump and deny.