This phony crisis is brought to us by the folks who looted the economy in 2008, and have yet to be punished. Claims of insolvency made by looters are particularly ridiculous, but you wouldn't know that from reviewing coverage in the U.S. mass media, which takes Washington's Kabuki theater "politics" with utmost seriousness. Of course, major media corporations are themselves closely linked to Wall Street, and well know it, so we cannot expect candid commentary about our economic distress from this quarter.
In any event, we have all heard the solemn pronouncement that, "It is in the nature of entitlements to continually expand," which is supposed to frighten us into believing that government social programs will inevitably crowd private investment out of capitalism's glorious "free enterprise" system, resulting in general economic collapse. This ignores the fact that it has been unrestrained private financial manipulation, not runaway government spending, that has repeatedly ushered in collapse or near-collapse, as in 1929 and 2008. These crises - the most recent and the most profound - cannot with any credibility be blamed on social democratic excess.
Furthermore, if there is an irreducible conflict between profit-seeking and social democracy, there is no reason a social democratic populace (such as exists throughout the industrial world and even beyond) should not seek to resolve the conflict by limiting (or even abolishing) capitalism rather than social democracy. Endless austerity is scarcely distinguishable from collapse itself, and since the dynamic sector of industrial capitalism has long been state guided, there is no reason the general public should not seek to democratize that guidance in order to "promote the general welfare" instead of just the private welfare of a handful of transnational corporations and international banks. In other words, there is absolutely nothing wrong with a "Nanny State" generously funding the educational, medical, and retirement needs of the population that pays its tax bills. That's precisely what democracy is for.
Of course, such common sense observations will be greeted with indignant disbelief: "Money doesn't grow on trees, you know!" But the idea that we are constrained by a finite supply of money is as ridiculous as believing that carpenters might use up our entire supply of inches and feet, or bus drivers run out of miles, with both groups thus rendering themselves permanently unemployable. For the fact is that money is a measurement of wealth, not wealth itself, just as inches and miles are measurements of distance, not actual spatial limitations.
The problem is not a scarcity of money, but the false belief that money has intrinsic value. Believing this, society is organized to maximize returns to speculators who "create wealth" by exchanging worthless financial instruments for tangible resources like homes, jobs, and pensions. The results are naturally catastrophic, and by now the process is so advanced that these alchemists of phantom wealth have created financial claims (asset bubbles) well in excess of the value of all the world's real wealth combined, guaranteeing massive upheaval even within the relatively stable societies of the industrialized world, such as we are now seeing in Europe.
It is well worth keeping in mind that those who insist we can no longer "afford" Social Security and Medicare do not bring a similar judgment to bear about the bankers who received trillions of dollars of public bailout money after crashing the economy in 2008, money they used to throw extravagant parties, pay out lavish executive bonuses and dividends, and finance merger mania among looting institutions. We are supposed to accept all this on the pretext that making a few people fabulously wealthy without the requirement that they produce anything of real value guarantees everyone a trickle-down benefit that is the essence of the U.S.'s broad prosperity.
Of course, that is perfect nonsense. The idea that financial speculation, asset stripping, predatory lending, risk shifting, leveraging, and debt pyramiding is good, and government-funded retirement and health care is bad because it impedes these essential functions, is like saying that leukemia is good and normal blood cells are bad. Until we forcefully reject such absurdity, our nation's financial house will continue to move toward the Greek model, which has reduced the Greek middle class to utter destitution.