AoD: Yes, perfectly stated.
Wangel: Printing more money does not work. It would just devalue the amount that a dollar was "worth", leading to inflation. Brazil tried this, the stupid economic policy makers over there thinking exactly what you proposed.
bigvince: Gold is not used to back up money anymore. This sytem has not been used since the early 20th century. All money printed (ALL OVER THE WORLD) is now the "fiat" type of money.
Anyhoo,
DOMESTIC Debt is not that bad. FOREIGN Debt could be bad.
You cannot compare a country to a person.
First lesson of government economics:
The government has ultimate coercive power.
Repeat after me:
The government has ultimate coercive power.
Let me say this again:
The government has ultimate coercive power.
In essence, a gov't can tax you to the hilt. There really isn't much you could do about it until election time, and even then if all parties agreed that high taxation is the way to go, you're still up $hit creek.
Also, consider what would happen if a gov't did default on it's DOMESTIC debt. What does this mean? Does it mean you'd pay yourself $10,000? Who is the money owed to? Foreign debt of course is a completely different matter and can be extremely dangerous.
Also, gov'ts will always have some debt. Short term debt (<1-2 years) is almost harmless and in many cases a good thing (e.g. the car loan thing. Sorry, but you're an IDIOT if you use that $30,000 in savings to get yourself a car. The better plan of attack is to get a $30,000 loan, and if things are SO BAD that you can't pay the loan, THEN use the $30,000 you have in savings. At least you'll get a bit of interest off your savings).
And how about things like Treasury Bonds? They count as debt!
I highly suggest that if any of you have any interest whatsoever in this, take an Economics of Government course at your university/college. You will learn a lot, including just WHY many countries have so much debt (read: Keynes). You will also be able to tell when politicians are yanking your chain around economic policy.
Actually, let me give an example of how high taxes COULD be good:
If a gov't has a policy whereby a person gets a tax deduction for a registered savings plan, then this would "induce" people to save more in order to save on taxes. The savings rate would go up, increasing the money supply. This would in turn lower the going interest rate for loans, stimulating the economy as more people borrow for capital expenditures.
Mind you, I don't agree with the above scenario, just pointing out how things are not always as cut and dried as people think.