Either way, the economy will flatline within this generation. You can't have a debt-based economy, and have that economy sustain itself. Obama's band-aid approaches will help us hold on longer, if Romney somehow manages to gets elected, I see it flatlining around the end of his first term.
Uh, yes you actually can. Capitalism needs debt to actually work and thrive. "You have to spend money to make money" and all that jazz. When government runs at a deficit, people can save; the opposite is also true. If government is continually running surpluses or balanced budgets, the private sector has to pick up the tab for spending that would have normally been done by government, which in turns leads toward recession.
Now I agree that the current debt arrangement is unsustainable, but only because these debts are not held by Americans, for the most part. Japan is hitting upwards of 230% of GDP to debt ratio but it fundamentally doesn't matter, because the debt is held by the Japanese people, which allows for large scale economic growth. That's why we didn't collapse outright during World War II. We owed ourselves the money, which gave us opportunity to invest in economic growth and development. Today, however, we owe Tokyo and Beijing the money, which only allows us to become less sovereign and further within the grip of these nations.
I'm not talking about government debt. I'm talking about an economy built on companies constantly lending money to people that they don't have with interest they ultimately can't afford (i.e. credit, etc). It's a bubble that will inevitably burst.
