Social Unrest?

Unlikely. Regardless of current economic conditions, the US has still never once defaulted on a loan payment, and is in fact forbidden to do so by law. US bonds remain highly valued. Even when US credit was downgraded by one agency, the value of bonds went up.The amount that can be borrowed is technically limited by the amount of investors, but that's a resource that hasn't actually seemed to be decreasing any time soon.

Sure it would. And a VAT could be implemented effectively in the US to increase revenue.The problem is the implementation itself. Even if we ignore the political reality of adding such a significant tax, the rate itself is a significant issue.VAT taxes are typically not flat, yet "national sales tax" or consumption tax proposals typically are. Flat consumption taxes are regressive rather than progressive; in other words, the more money you have, the lower the percentage you actually pay in taxes.This is because consumption is limited. If you make $20k/year, you need to spend all of that money on food and clothing and housing. If you make $500k/year, you only need to spend a portion of that on your bare necessities, and are not likely to spend all of it even when luxuries are added in. If you make $10 million/year, you'll only spend a tiny fragment of that amount on your bare necessities, and still have tons left over after luxur1es.The person making $20k will pay consumption tax on something like 80% of his income (assuming rent and a few other items are not taxed). The person making $500k will pay consumption tax on something like 40%, and the person making $10 million will only pay consumption tax on something like 20%. I'm pulling those numbers out of my ass, but the general trend is accurate if not the specific values.This means the the actual burden (not the dollar amount, but the relative impact on your life and actual ability to pay your bills and maintain even a minimal quality of life like eating every day) of such a tax primarily rests on the poor, who can least afford to do so.Most countries with a VAT resolve this problem by charging a lower VAT or even no tax at all on bare necessities like non-prepared food and housing. There's no guarantee that this would happen in any US proposal, though - and in fact so-called "flat tax" proposals have often included no such exceptions in the belief that "fair" means "Everybody pays the same percentage, even if it affects some people more than others."The other argument against an additional national sales tax is that implementing it in the current economic climate would stagnate growth from the bottom up. If you tax me an additional 20% on everything I buy, I'm not going to be able to buy as much, which means the companies I buy from will make less money, and so on.I'm not necessarily against a VAT in principle if its implemented in a way that doesn't force the poor to bear the highest burden, but I'm not so sure that now is a great time.I think better revenue increases would follow along the lines of removing the cap on Social Security taxes and creating new tax brackets for ever higher incomes, and taxation of capitol gains, just off the top of my head.

Whoa, there, sparky. Calm down.Your retirement isn't in danger because of debt to China.Your retirement is in danger because of irrational social security taxation (in the case of social security, where the taxation cap is around $140,000/year, meaning everyone who makes that amount or greater pays exactly the same dollar amount into SS, whether they make $140,000 or $140,000,000) and because of the threat posed by a deregulated banking industry (which caused the current crisis).Debt to China puts us all on the hook, yes, but we still have control over our own laws such that we can change who pays what portion of the burden. It doesn't have to be the middle class. It really won't be, if the trend continues, only because the "middle class" is itself shrinking as the rich get richer and the rest of us stagnate until we're all poor.More importantly, as crashfrog pointed out, when deficit spending helps to increase the GDP, that means the deficit spending increases tax revenue, which means that deficit spending can actually create more money and pay for itself. The trick is more what you spend the money on as opposed to how much you're spending. That depends on what the foreign investment pays for. If we use a bond measure to pay for new roads, you do benefit. If we use bonds to bail out a bank...maybe not so much, at least not directly. Sane solutions begin with putting away the Internet Tough Guy revolutionary speech and thinking about what actually is or is not a problem and how best to address it.The major hurdle is political feasibility - even when you find a solution that can work, getting enough Congresscritters to actually get the measure passed in such a way that it still has the same effect is damned near impossible. And while everybody tends to have a resoundingly low opinion of Congress, nobody seems all that eager to get rid of their own representative, often because the only alternative is even worse.