Generational imbalance

I've been studying for the CFA and was planning to post insights I picked up from the various chapters. For multiple reasons, one of which is that I have not read all that much material :) I've been lax in this regard. However, this just struck me as something I must write about since this dwarfs all our present problems!

The fiscal imbalance, which is the present value of the government's commitments to pay benefits minus the present value of its tax revenues stands at a staggering 54 trillion dollars. This is almost 4 years of the entire nations present GDP. Guess what..the only way to meet this gap is
- Raise income taxes
- Raise social security taxes
- Cut social security benefits
- Cut federal govt. discretionary spending

And to think that we are going to be running deficits for sure in the next few years to tackle the "financial crisis" leaves me wondering what the hell can be done. The dollar will get smashes over the span of the next 20 years. The US will have to increase exports like crazy to the rest of the world, exports of tangibles (including software :) and inflation will run rampant. As always though, there will first be a hint of deflation before inflation. Are we back into the 70's inflationary spiral?