Until we can get our budget under control, nothing will happen. You can't tell the guy paying the electric bill to 'F off' if you still want to have heat in the winter.
The most important reasons for us to get our finances and oil use under control are all national security related. I don't understand how the neocon camp doesn't understand that.
Getting our budget under control is "simple". It just requires some combination of less savings by the US private sector, less savings or higher deficits for state and local governments, and a reduction in the trade deficit, due to the basic accounting identity:
private savings + public savings = trade surplus
Here deficits are negative public savings, so reducing deficits means increasing public savings; the rest follows.
Reducing private savings is mostly what we did to keep the deficit down in the 90s. I'm not sure how feasible it is as a strategy now, given that private savings in the US have been so low for so long; people can't really keep spending more than they make.
Which means that what really needs to happen is a reduction in the trade deficit. This is also known as having a lower dollar (and in particular, a higher-against-the-dollar renmibi).
The good news is that getting the renmibi to rise against the dollar is also "simple": just get the PBoC to stop buying US assets (that includes US government bonds) to artificially hold the renmibi down. That will both help the US employment situation (giving us more headroom in terms of private saving) and increase US exports while decreasing US imports.
Basically, at the moment China is using currency intervention to export unemployment and government budget deficits to the US via the trade deficit. To get the US economy to rebalance and be sane, that needs to stop.
Of course we could keep the trade balance as now while cutting government spending and increasing taxes, the way we seem to be headed. That exactly corresponds to reduced private savings. We could do that for a bit perhaps, but it's really not sustainable as things stand.
If you constitue a significant amount of the electric guy's revenue, and he already has a massive amount invested in you, then actually yes, you might very well be able to tell him to temporarily F off and still get heat in the winter so long as he thinks you'll become profitable again one day.
That being said, I do agree it's a good idea to get your finances under control.
The most important reasons for us to get our finances and oil use under control are all national security related. I don't understand how the neocon camp doesn't understand that.