Kudos to Krugman (yes, again) for stating the obvious -- which, remarkably, is becoming very difficult in today's economic and political atmosphere: "at some point bond markets will balk � they won't lend money to a government, even that of the United States, if that government's debt is growing faster than its revenues and there is no plausible story about how the budget will eventually come under control." Economic pundits for the most part walk about in a glowing golden fog (most likely left by a careening SUV heading up a mountain to take in the beauty of nature) when thinking through the ability of the United States to levitate in the face of current account deficits over 5% GDP, a rapidly falling dollar, and the ability to run an empire and a republic at the same time. Krugman brings us back to terra firma by stating the obvious truth -- a hard rain is gonna fall.
Krugman emphasizes the fundamental threats to Social Security and Medicare, but the General is looking at the ability of the US market to suck up global overproduction as well. After all, the American middle and working classes have been bought off into neoliberal globalization with cheap goods from East Asia filling the shelves of their favorite big box retailers. When (it's only a matter of when) this come to an end, the political aquiesence of the majority to the neoliberal minority (whether in Democratic or Republican, Liberal or Conservative guise) will be sorely tested.
Americans, the General believes, will sacrifice their health and their retirement and their childrens' education for cheap stuff, but they won't sacrifice cheap stuff for anything.