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No, seriously - this is actually good news. The basic problem was an overleveraging across all sectors of the economy and this is good news because the US consumer unequivocally needs to deleverage before a recovery can be viable. The choice has always been simple if you owe too much money: declare bankruptcy, inflate your way out of it or find a sucker to help you roll it until you can pay it off.

The inflation part is both politically and socially intractable (pop quiz: what do the AARP and the largest Communist nation in history agree on?) - the level of inflation needed to devalue our debt would start approaching historical levels. Maybe not as bad as Weimar Republic or Zimbabwe levels, but significant enough to really hurt.
Pitching increased capital suckage into the US economy until we can slowly repay our debt back also doesn't seem like a great option. The pitch may go well and the capital may be out there but inherently it assumes a level of self-restraint and foresight that is laughably distant from our American democracy. When we are still wasting billions on Cold War weapons, it is tough to believe that as a nation, we will patiently delever.
In practicality, as always, the answer will be some combination of the three options. Bankruptcy is tremendously traumatic on a personal level, not to mention the lasting effect that it has on your credit score and the waterfall effects of that. However, on a macro level it is good and serves a very practical purpose - it wipes out debt, allows the economy to bounce back rather than stagnate in zombie land and punishes lenders for making stupid decisions. Some may argue that it makes debt more expensive - we would argue it more accurately prices money going forward. Which would you rather have?