How will the US debt situation play out?

It's hard to say much with certainty here beyond just recognising the current path is unsustainable. Obviously the debt/GDP cannot increase indefinitely without either the government ending up bankrupt, or more likely hyperinflation.

The issue I think we have today is that there's no real political motivation to fix these problems and people are unhappy and unwilling to make scarifies, such as paying higher tax or cuts to government spending.

However, the US is in a relatively strong position given many developed countries find themselves in similar positions. The US has a lot of debt, but it's not that much more than other comparable nations. The US also has more fiscal room to raise taxes as reduce its deficit.

My guess would be that other nations find themselves in a serious sovereign debt crisis first and this will worry politicians and the US public enough that drastic action is taken.

The most obvious outcome in the US is higher taxes and increases to the pension age. While European countries that take action will likely rely more on spending cuts in addition to increasing the pension age.

But this assumes that productivity isn't going to boom in the years to come from AI or something similar. A significant increase in productivity would be the best solution to this problem, but we shouldn't assume that's coming.

As an individual the best thing you can do to safeguard from this is diversification so you're prepared either way. You'll want to own assets that give you protection from inflationary or a hyper-inflation scenarios – things like gold, a diversified stock portfolio and property. The other slightly less likely risk would be some kind of economic crisis that results in a global deleveraging, in which case you'll probably want to ensure you're debt free and have plenty of savings. If you have savings, have no debt, own property, and have a some diversified investments you'll probably do okay whatever happens.

If you're anticipating a crisis and want to maximally profit from it then you'll need to decide if you think the risk is hyperinflation or an economic crisis followed by a deleveraging event similar to the great depression. If you think hyperinflation is likely then taking a ton of long-term fixed debt out now and buying assets like gold or property would be the best option. If you think a great depression event is likely then you want to ensure you're debt free and maximise your savings.

Most of US debt is owed to US people's. Primarily, social security. Are we just going to be screwed in retirement?

China holds a small part of the debt, in treasuring bonds that they can roll over or not into new T-bills. It is more about keeping dollars from heating up their market than a need to lend money. They can simply stop doing that if the Americans decide they don't want to honor T-bills anymore, but I'm not sure what that gets us?

Social Security was a great idea in post-depression times. I don’t think it would ever pass today- one, because so many Americans lack empathy(1) and two, because there are better systems that have been proven to work over time in countries like Sweden. The problem, as is so often the case these days, is that Republicans run their excellent propaganda machine to try to strike down social security retirement, Medicare/medicaid and food stamps without a replacement. “We don’t need a replacement!” Democrats, playing their part, are asleep at the wheel, and instead of proposing a revamp of the system to align with modern socialism (eg UBI), they simply want to kick the can down the road and keep everything as it is.

(1) https://jspp.psychopen.eu/index.php/jspp/article/view/5209/5...

SS is easy to fix by just lifting the income cap on it and making it more progressive. But Republicans aren't going to do that, I guess.

Even today if you retire on SS alone, that's basically welfare that you paid for, it isn't really enough to live but might prevent you from starving to death. Thankfully, our life expectancies aren't rising so fast anymore (and actually falling a bit), or we would have a huge problem (forgive the dark humor).

"SS is easy to fix by just lifting the income cap on it and making it more progressive."

That's kind of a loaded statement. Just eliminating the cap can strengthen the system, but won't fully fix it. We could fix any deficit by increasing taxes enough (eg making it more progressive). I would potentially support removing the cap, but I would want to see changes around capital gains taxation before making the tax more progressive. I think most of the deficit fixes should be through actual tax architecture changes (capital gains, AMT/deduction, etc) vs just increasing rates or adding higher brackets.

"it isn't really enough to live but might prevent you from starving to death."

I believe the benefits have decreased in real value over time. However, it was originally intended to prevent people (mostly widows, children, and elderly) from starving. It wasn't designed to be a sole retirement program - people were expected to save or buy bonds. This is a similar type of thing for other retirement topics - like the 401k was originally meant to be supplimental. Most people in the US are extremely poorly prepared for retirement for a variety of reasons.