USG is going to need a "reset" in 2-3 decades, so a crash really wouldn't be that bad, right? It's not like people take on boat-loads of debt, then hold onto the cash - they use it for major one-off expenses, generally. I don't really see why the "dollar" is looked at as something we have to protect, as if it magically *is* the economy. If the dollar died, industry would move on to a new currency, pay off their near-worthless debts (hope you don't have an ARM!), and rev up the economy like it's the WW2 boom again.
However, the US as a whole is in a pretty good position compared to many other countries because while it does hold a lot in debts, it also has an exceptionally high relative amount in free, productive assets which are not currently "taxed into money" (that is, sold to cover taxation). The US government's going to have trouble paying its bills, but if the government's prevented from collecting that from the people and businesses, turning productivity into government expenditure, I think a USD collapse would end up being a net benefit for a majority. The longer we keep tax rates low, the longer we can prepare our industry for the boom, and the stronger it'll be. To get things restarted "right," though, the government will need to start taxing at rates which cover its expenses, and hopefully that comes with some massive budget-trimming and an overhaul of how our legislative system works, where lawmakers stuff hundreds or thousands of unpopular appropriations (and worse) into bills which "must" pass.
I think a lot gold bugs and the like look at things like PMs and recognize how valuable hard assets would be in the event of a USD crash, but then don't recognize how much more valuable it is to have machines and other infrastructure to convert hard assets into something usable -- rather, they undervalue the actual US economy because they spend so much time looking at scary numbers indicating bad times for the USD or USG. A USD crash doesn't necessarily mean there's going to be a US economy crash, as far as the productive, non-parasitic economy's concerned. I could be way off-base, though... I'm kind of trolling just so someone can show me where my thinking's wrong. There're so many variables, it's difficult to get concise explanations.
If the USD does crash, the government would have failed in one of its key responsibilities of keeping inflation under control. People with mortgages would be happy - their debts would be easier to pay off. The weakest sections of society would be hit the hardest - the poor and the pensioners.
I don't see why the poor would be hit. Assuming the poor are debtors, they're fine (assuming the economy doesn't sympathetically collapse due to
). Pensioners are screwed if they're mostly holding USD-denom bonds and other USD-denom debt, but assuming they have a diversified basket, at least wouldn't be wiped out.
ETA: I take that back. The government would probably be one of the last to abandon the USD. If welfare amounts aren't adjusted MUCH more frequently than they are now, it could be devastating to the poor and economy at large.
