All the brouhaha over the "fiscal cliff" has obscured the only real solution that exists — understanding what is really happening with the tax and monetary systems of the world so that such a situation cannot happen.
Yes, believe it or not, in a very real sense the problem is not so much with the system as in how the system is being (mis)used, and in the definitions of money, credit, banking, taxation, and property that have gained currency (if you'll pardon the expression). Mess up just one of those institutions, and the others inevitably become corrupted.
The global financial system is in a shambles. The commercial and central banks of the world are designed to operate in accordance with one set of principles, but are being used — mostly by politicians who have political, not financial or economic goals in mind — as if another, entirely different set of principles were the basis of their operation.
Added to that is the fact that, in most cases, the people in charge can't tell the difference between banks of deposit based on past savings (e.g., credit unions, savings and loans, investment banks), and banks of issue based on future savings (e.g., mercantile and commercial banks and central banks).
Another serious problem is that most economists (whose theories provide the basis for the politicians' policies) couldn't tell you the difference between a mortgage and a bill of exchange (according to financial historian Benjamin Anderson, one of the first principles of finance), or the difference between a private sector bill of exchange and a government bill of credit.
That's why the world needs a massive reform of both its tax and its monetary systems. The world's tax codes are fantastically complicated. This is because they are being used for "social engineering" when the sole legitimate use of taxation is to raise money for governments to carry out their legitimate functions. The chief goals of such social engineering via the tax system are 1) Ensure that enough wealth is redistributed to take care of people, and 2) Prevent too much wealth from being redistributed so that the rich can finance new capital and create jobs.
As a child could see, these goals are incompatible, making for much of the chaos. The monetary system is similarly manipulated, the goals being 1) Inflate the currency enough to create full employment, and 2) raise prices to "force saving" and transfer wealth from consumers to producers so they can finance new capital and create jobs, but forcing consumers to pay more for less.
These goals, too, are incompatible. Sustainable jobs only result (except for those subsidized by government, and which therefore represent a drain on, not a gain to the economy) when there is sufficient demand to justify hiring more workers. Raising prices via inflating the currency, however, reduces demand, and thus reduces the need to create more jobs, and sometimes even eliminating jobs as aggregate demand falls.
There is also the paradox of politicians who try to repay past debt with cheaper currency by inflation. Yes, you can transfer value from creditors to debtors that way very easily. The problem is that when the government is the debtor and can control the money supply, politicians start believing that the inflationary loss to consumers represents profit to the government. Not so. By making people worse off by inflating the currency, the price level goes up. Any "gains" get eaten up by higher prices paid for the same amount of goods and services. Strike one. Strike two: believing they're turning a profit when all they're really doing is redistributing wealth, politicians spend more money, getting less and less for more and more at a faster and faster rate. Strike three: spending for social programs also starts to increase exponentially due to the fact that people's ability to live within their grossly depreciated means evaporates.
Reform of the tax and monetary systems must therefore go together, but if you're forced to choose, reform the tax system first — the harm of a bad tax system is more immediate and longer lasting than the problems of a bad money system.