Chuck, you've outlined the case very well, and it is indeed a problem.
So what do we do about it?

The very first step has to be a huge reduction in government spending.

Each subsequent administration spends money even faster that the previous.
Until recently, each side had an excuse that the "other side" controlled either
the Executive Branch or Congress. Now that one party controls both, spending is
out of control like never before. We're borrowing almost $2 billion a day just
to keep up with
it. (to put that in perspective, every six weeks we're borrowing as much money
as congress appropriated last year to continue the war in Iraq!)

If we are going to reduce wages in the US,
and it seems that we must in order to compete with the third world, that money
that remains in a worker's paycheck has to count for something. High interest
rates (to support the government deficit) and high taxes collected either at
the time the spending is occurring or "postponed" until another party is in
power to absorb the political heat take far too much of the disposable income
from the average worker.

To say that taxes are the only problem, and that tax cuts without spending cuts
will solve it, is silly. Every dime of the deficit is a deferred taxation, we
just haven't scheduled the collection yet.

Just like $3mm a month CEO salaries, there is a lot of waste in the government.
Cutting out the waste would reduce the cost of government while leaving basic
services in tact.

Second step is to tax exported capital.
You want to send $1 billion US to East Overshirt to build a factory that will
put
35,000 Americans out of work? No problem, but we do have a bit of a tax you
need to pay to cover the social costs associated with your private
profiteering.
It just might be so high that you'll think twice about moving the
factory..........

Third step is to progressively eliminate social security, and the associated
taxation. It's too late to tell people in their 60's to start saving for
retirement because there isn't going to be any social security.
But it might not be too late to tell those
55-60 that their benefits will be only 95% of what they expect. Those 50-55
will have to
save enought to cover 10%. Ages 40-50
will get only 80%, ages 30-40 only 60%
(they have more decades to compound interest on savings), ages 20-30 only 30%,
and kids just starting off......zero.

When Uncle Harry or Aunt Georgia spends
every dime they ever earn and can't pay the rent in their "golden years" they
better hope the relatives will take them in.

There might ge a middle ground on Social Security. Nobody should be without
minimal and safe shelter or susbsistence food, and nobody should have to die
simply because medical treatment for an illness in unaffordable.
However, if able bodied and mentally alert people want to take the last few
decades of life "off" and not have to work for a living, it should be up to
them as individuals to arrange for that rather than up to all of us as a
society to guarantee it.