What we have to work towards is a structured realignment. The fact is that you are correct, things are dire. They will not be paid. However, we can eliminate many of the debts (unfunded liabilities) by restructuring or eliminating those liabilities.
These changes will happen. Hoping that they occur in a cataclysm and working toward a cataclysmic result will not be the best outcome. Though it may be inevitable.
It will need to be bad enough to make the Great Depression look like a walk in the park.
Think of it as old fashion Chemotherapy.