United States Default...Not Today!

I always wonder what is really happening when the media and government keep our attention concentrated so uniformly on one topic.  This past few weeks it has been agenda setting of "Will the United States default?"  The media had the whole country whipped into a frenzy with worry and disgust.  And alas, it has been kicked down the road till after elections.  But the real question is whether the country is out of the woods over this or is it growing ever so much larger with unimaginable consequences?
Neel Kashkari (Managing Director for Pimco) reported to Bloomberg News that the economy has taken on so much debt over the past few years to "fuel consumption" that spending has now fueled a crisis.  He believes that we need to restructure the economy towards savings and investment instead of spending and debt.  He argues that the politicians need to be leaders instead of looking to the next election or checking the latest poll for what is popular.  Kashkari argues that when government taxes an activity that society uses less of a certain activity like cigarettes or alcohol.  He stated that when government wants people to work more and save more that they shouldn't be taxing income and savings.  He also emphasized the need for a massive architectural change by considering Means testing.  Means testing would eliminate those that have saved all their lives, that have high paying jobs and retirement from collecting Social Security and Medicare and Medicaid.  Regardless, that they have paid into the fund all their lives.  I suggest that with the means testing and disqualification for entitlements that they should receive tax breaks on their retirement funds on scale according to amount of entitlement forfeited. 
When asked if he felt the United States deserved a credit downgrade he said that the US has too much promised liability, stating that "with all the promises we have made out into the future it does not hold well for our fiscal situation."  He says debt will be 85% of GDP by 2020 if cuts aren't made.  As such he argues that without getting the economy growing again and cutting entitlements that "we will eventually get a downgrade from Standard and Poor's and Moody's."  He believes that a downgrade could trigger a financial crisis as markets are believing in something that is proven untrue and could  cause the markets to adjust violently as we saw with the housing bubble.  Furthermore, and of great importance, is that the US Treasury Bonds are defined as the risk free financial instrument that underpins the entire global economy.  If people wake up realizing that they have taken on too much risk it could de-stablize the whole global economy.  Then the Central Banks around the world would be more diversified as to where they put their reserves by not putting them into the dollar. 
And that is where all this could takes us.  What would it mean if the dollar was not the reserve currency of the world?  Many countries would like to see this and the Economist has reported that that is exactly what China is preparing for.  So what have we accomplished by kicking the debt problem down the road...?  There will be a day of when the piper calls.  If we don't deal with this now with some pain, it could very likely become terminal for our nation.