As the deadline for a budget agreement looms in Congress, Silvia told CNBC that the US must recognize that the moderate economic growth forecast by most economists for the country will fail to generate the tax revenue necessary to fund long-running government entitlement spending.

"We have to make some arrangements in terms of cutting back the promises that were made by prior politicians for these entitlements," Silvia said.

"(We've had) forty years of political promises to give people certain entitlements, certain benefits. And we've now come to understand that the United States is in a very difficult position than it was in the early post-World War II period. We're not the dominant economy. And our pace of growth has moderated. Our ability to finance this is all limited."

Republicans and Democrats are at loggerheads over how to fund the federal government for the final six months of the 2011 fiscal year.

If no decision is made by midnight on Friday, a government shutdown will take place.

"It basically comes down to: Can the Democrats give a little bit in terms of spending over a longer-term time period?" said Silvia, who previously was a senior economist for the US Senate Joint Economic Committee.