No, they haven't. In the US for example they get together every now and then and have a big fight over raising the debt ceiling, with elephants and donkeys both playing chicken over choosing to default but as you say, actually defaulting would bust all major western economies - so they won't. The only way they could be forced to default is if they literally could not find some-one who would lend them enough money to make interest payments, which is laughably implausible - the US has a credit rating of AAA and the UK has AA+, which in layman's terms means that everyone and their mum are falling over themselves to lend money to either country.
This is a completely separate issue from the many actual problems caused by a high national debt, and I think paying it down should be a priority, but these apocalyptic "we'll default and the banks will come and claim their money by threatening pensioners with pointy sticks" scenarios are highly silly.
Uh huh. You'll notice that at the moment I'm not proposing any such thing, but yes - in general I believe in more progressive taxation. Regarding benefits, the vast majority of (non-communist) governments in the world have all cottoned on to the positive economic effects of supporting unemployed people long enough to find another job instead of letting them starve.
Well for a start your wrong there. S&P's US ratings are AA+/A-1+ with a stable short to medium outlook and AA+ with a negative long term outlook, citing political risk and rising debt burden. So in reply to your point, the US is actually going to find it harder to acquire credit, and the credit they do get will carry heavier interest rates, therefore increasing debt in the long term and in turn the risk of a default.
Also to add, if the US had to bail out the banks and big industry again, it would bankrupt the country and there wouldn't be much they could do. Bail out to save jobs and some sort of economy, print more money in turn devalue the currency in turn increasing debt, hyperinflation, whole world of trouble. Not bail out, cause mass unemployment as never seen before, loose large chunks of industry, massive deflation, whole world of trouble. See where this is going?
I wonder how many federal workers are as optimistic as you over their governments finances?
Regarding your last point, that's all well and good until you end up with a situation like in Britain where the native population have generations used to living on handouts and so have no incentive to get a job and the jobs that are available are given to immigrants who come here and work for cheaper. While obviously immigrants contribute in taxes they all send a lot of money back to their native country's so more money is leaving the country than going back into the system and meanwhile the lazy benefit takers do less, getting fatter and unhealthier and adding an additional strain on the already stretched health service.
Tell me how either of these scenarios is sustainable?