But if it were to come to that, I'd replace it with some sort of digital currency that is "private" but accessible to the government within rules and reason of course.
It's up to the "trial balloon floated in Congress" point. The trial balloon has so far always been shot down, but it's really only a matter of time. If the government could just push a button and have access to literally every single transaction that occurs, they would certainly do it. They wouldn't even blink.
Also, I want to say, I'm just linking one example. You can follow up with search terms similar to the ones used in that article, and probably find even more mainstream sources discussing it. It's a topic in the air in financial circles.
Edit: Bit more searching, here you go with something much more mainstream, Forbes: https://www.forbes.com/sites/advisor/2020/10/22/the-pandemic...
And again, my main point here is that it is a topic of conversation, not making any particular claims about where we are currently.
Can you provide a source for that? First I've heard of such an argument from government officials