I think that ultimately the United States will have to make some tough choices on "entitlements" and other government expenses.

This year 2010 represents the first year since "baby boomers" (those born after 1945) begin to retire. Over the next 10-20 years the American healthcare and pension sytems will face tremendous pressure to come up with the funds to continue to give people services.

As the population ages, those costs will continue to increase and the American government will have to either raise more funds or cut services. Since the funds come from taxation, it is quite likely that the US will have no choice other than raise taxes. The US already has the largest public debt in the World accounting for nearly 28% of the entire World's public debt.

Even without "Obamacare" the American healthcare and pension systems are already stretched to the maximum. The other option is to take money from somewhere else. That could mean less spending on infrastructure (e.g. tranportation infrastructure), a bad idea since that would slow down the economy too much. It could also mean a drastic reduction in military spending.

The Iraq War was payed in part through massive borrowing (never had the US borrowed so much money in its history) and in part through "reallocation of entitlements". The Bush administration took hundreds of billions of dollars that were sitting "idle" in the pension system, and through fiscal manouvering, reallocated them to the military. Alan Greenspan knew this and he was glad to be a part of it, but he warned that if something was not done the pension system would run out of money by 2017.

The only way the US will be able to restore those funds and pay for healthcare and old-age pensions will be with drastic cuts in the military. That will mean a massive recession and massive unemployment because the Cold War turned the US into a war economy. The US will have to take big steps backward in its global military presence, and scrap wasteful defense initiatives such as the ICBM Interception System, which at the research stage alone is costing over 1 trillion dollars.

So the priorities will be clear cut. Either healthcare and old age pensions, or continue to spend trillions in the military. A tough choice for a superpower!