One of my economic dreams, albeit implausible, is that governmental entities could learn to live within their means, and do so without the need for drama and crisis. Like many economists I see little harm in not balancing the budget in any given year, but see little good (and eventually much harm) in ever-increasing budget deficits year-on-year when measured in "real" dollars. This latter possibility I include in the nightmares realm.
Another recurrent economic nightmare is that somehow our politicians and captains of industry will so mess up our system that the United States will become an entrenched plutocracy (Wikipedia), better still kleptocracy (Wikipedia) — assuming that we are not there already. Note: All my chatter about power and corruption here.
Much of the talk this week about the budgetary plight of various states has oddly — likely by political calculation — been intertwined with talk of eliminating collective bargaining by state employee unions. Governor Scott Walker of Wisconsin has been at the epicenter of the debate on the issue, with tens of thousands of protesters surrounding the state capital. Walker's steadfast refusal to budge on "collective bargaining" for pensions and health care — which he wants to deny, although with exceptions for police and firefighters — puts him at odds with organized labor and with liberals generally (NY Times, Steven Greenhouse; Huffington Post, Robert Reich). Notably, police and firefighters too are standing with their fellow state employees in protests.
Alarmingly Interestingly, two Darth Vaders of key players in American plutocracy, the Koch brothers (Wikipedia), showed up in a cameo role. The incident was popularized in a stunt (Huffington Post, Jason Linkins), a fake phone call from David Koch to Governor Walker. For more, and tiny bit less bias than I've used here, see "Who's Afraid of the Brothers Koch" (NY Times, Tobin Harshaw)