The debt and deficit need to be addressed. It's possible the party could continue for a long time, but the longer it goes on, the greater the risk grows that certain shock events could lead to loss of faith in the US dollar and an exodus, and the consequences of that are too dire to ignore. I don't think that's a fire we as a country want to be playing with.

Tax hikes are needed to address the situation, but I'm always surprised how rarely spending cuts come up as part of the solution in discussions like these. Admittedly, a large chunk of the federal budget is hard to make a dent in politically, like the entitlement programs. But given how the government is immune from competition, insulated from forced leaning down in hard times, and largely lacks performance incentives, there has to be a tremendous amount of fat and inefficiency ripe for cutting.

Most people who've had experience with the federal government probably have stories to share of rife inefficiency and poor performance. Reportedly only 1 in 5000 people are fired each year for performance issues. Some agencies like the state department with over 28,000 employees boast a record of having fired only 6 people for poor performance since 1984. An agency of 28,000 with 6 firings in 40 years - think about that...

I'd love to see a complete overhaul of the federal compensation system with a focus on performance incentives. I'd love to see aggressive yearly cost reduction targets established for every federal department with bonuses tied to achieving them. Incentivize management for improving productivity and increasing efficiency (e.g., doing more with less people). That alone won't solve the deficit problem, but it'd make a dent in it, and a dramatic step up in government efficiency can lead to many other benefits beyond just cost reduction.