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The facts of life are that if the US should suffer a Sovereign Debt Bubble deflation the Global economy will also fail. There are 4 reasons for this

1. The USD is the worlds Reserve Currency

2. US debt instruments are held world wide

3. The US is the largest economy in the world

4. The US provides Global Security

Let us just look at the US providing Global Security. If the US fails the US will no longer be able to afford its role as the provider of Global Security. To put it simply if the cat is away the mice will play. If the Global economy fails due to a deflation of the US Sovereign Debt Bubble chaos and fragmentation will result. Since power abhors a vacuum there will be those who are going to try and fill it.

So the question arises, what can the US do to avert a Sovereign Debt failure? To answer the question one has to first realize three things.

1. That to do nothing or by taking half measure will ultimately lead to a failure of the system. The time is past for the easy fix.

2. Time is now of the essence as every day that goes by the hole grows deeper which further limits ones choices till one has no choices left.

3. That there are 2 separate sets of problems facing the US. First and foremost is the Sovereign Debt issue. Second being the long term structural economic problems facing the US. Since the deficit and debt has grown so large it now does have an overlap on the economy which will only grow greater as time passes.

The first and most important problem is the deficit and debt issue because it affects the very FOUNDATION or structure on which an economy is built. It affect the medium of exchange in an economy which is its money. The idea is to stabilize the currency and its debt instruments to maintain confidence in their value. Since increasing the debt which is brought on by deficit governmental spending undermines that value or confidence the first order of business is to bring the Federal and State budgets into line with the tax revenues taken in. Since raising taxes and further Stimulus either by the Treasury or the Fed is now counterproductive in that each has a negative unintended consequence aka Catch 22, those are no longer viable alternatives. Also the creation of new governmental programs in the hope of rectifying or alleviating current or future deficit problems not only increase complexity of government it also adds expense which is counterproductive to the goal of averting a crisis. .The answer here is to trim the Federal and State budgets as quickly as possible to be in line with tax revenues. while this is not an overnight process as dislocations will result it must be done quickly and with resolve. The mere fact that one is taking the problem seriousily and is moving with resolve is a restorative of confidence. In other words time will have been bought.

The second order is to rectify the long term structural problems that the US economy has. They are as follows

1. The tax system must be reformed from top to bottom not only to simplify, make more equitable and most importantly to entice capital to be invested in the US.

2. The Regulatory environment must be streamlined so as to be business friendly and not to put road blocks in its way. The alternative is to have business go to where it is more friendly. The CA and Texas models are the proof of a negative and a friendly envirnoment.

3. The wage structure of the US has to be more in line with the rest of the world to be competitive. This does mean that Americans won't earn as much and the standard of living will decline. Americans will have to do with less. Here one remembers Jimmy Carter telling Americans to "put on a sweater." One also has to think in terms of what will the American standard of living be if America should have a debt crisis and the economy gets crushed or the malise of the economy continues?

So the question is who is going to step up to the plate by telling the truth and have slings and arrows thrown at them. Here one has to remember that the arc of history does get to its ineviatable end one way or another. The only difference being that by doing nothing the outcome will be more severe. One thinks that it is better to move proactively than to role the dice by doing nothing and have the potential outcome of having chaos reign. Further onee has to remember that the heyday of the American economy of the 1960's being hegemonic is no longer a reality. The US faces ever rising economic and political competition and that the desire to maintain or return to that former status is delusional. The choice is in the hands of the American people and by proxy its elected leadership.