It will probably go like this:
- We run out of money. The entitlement recipients CANNOT be paid.
- Rodney King-style riots ensue in every major city.
- The unionized police back off and refuse to put themselves in harm's way. Some citizens take up arms in self defense.
- The government sends paramilitary Federal police units after those citizens who defend themselves but ignores the actions of the rioters.
- Those who are financially able - realizing a dictatorship is coming fast - flee the country.
- The middle class disappears as Bosnia-like factional fighting takes hold in large cities across the US. Roaming gangs of marauders make rural life equally risky.
- The Federal Government relocates to Colorado, where its members can hide in secure bunkers. Much of America simply ignores anything they have to say.
- Markets crash. The dollar crashes. Famines set in. Millions die of starvation or random murder.
- Refugees flood into Canada, threatening to spread the conflict northward. Mexicans return home in vast numbers.
- The US military, realizing its command structure is jeopardized, ignores panicked orders from the President to fire upon American citizens and begins to desert and disband. Pilots and ship captains head for allied nations like Australia or Britain to wait out the resolution of the power struggle.
- The Federal government splits into factions, with rival Presidents and Administrations battling it out for control of what little government remains. A few nuclear missiles are launched. All prove to be defective or fail to hit their targets.
- Life for the average American temporarily dips to an 1800s level. Those who cannot grow their own food will likely starve to death.
- After the final collapse of the Federal Government, Russia, China, and EU step in to stabilize the UN's new North American Protectorate. The standard of living for the surviving 150 million or so Americans returns to a somewhat normal level over the next five years, but since the US Constitution is widely and incorrectly blamed for causing the conflict, there will be no significant push to restore a Constitutional government.
I fear a scenario like this is now almost unavoidable. The Fakers and the Takers are either going to have to accept that they aren't getting any more free government money, or they will end up losing their lives one way or another in the chaos that follows.