Public debt has been a growing problem for decades, but the gap between funded (+$17 trillion and predicted to rise to $20 by 2018) and unfunded (most estimates are well over $100 trillion) liabilities should draw more attention than it does. Revenues are simply not keeping up with the increases in public liabilities, though federal spending far outstrips state and local levels. The debt to GDP ratio is rising to unsustainable levels. The efforts to close that gap will be through such avenues as you as you mention, but those austerity-like measures will hit the public sector hardest. Many public sector jobs are just not as economically-productive as the private sector. Regulation hinders profits more than it encourages them.
Whether anyone agrees with the pension schemes of states and municipalities, the worry should be recognized. In the short term (the only way politicians seem to think), we are getting by, but it just takes a critical view to recognize what happens when those liabilities overload a system like Detroit when a recession hits hard, a trend that also seems to be slowly becoming more common. Some go down for obvious reasons, others seem unsinkable until they start to show signs of weakness. The rate of increase of the public debt unfortunately has increased, making tough economic times even moreso on the average taxpayer. Naturally, the rate of municipal bankruptcy filings has increased as well since 2008, to 8 cities or counties and 38 total municipalities by December 2013.
The positive side of all of this gloom is that we have numerous examples of the results of poor public policy that enables such out of control public spending and debt levels, which should encourage most municipalities to refrain from irresponsible levels of spending and debt. I try to be optimistic, but what I see in the news doesn't seem to be as encouraging. Perhaps it is time to consider something different, like Repudiating the National Debt?