I don't think you really get my overall point. You're calling for an end to the reckless U.S. economy but are failing to see the repercussions of that.
China relies on exports. No exports = no domestic spending = rising social unrest.
Not none but reduced globally to the US consuming no more than their level of production (US - Balanced Book), which would still see a massive reduction however
China has also relied on a manipulated currency to sell to it's main trading partners in the west. If this ends; again there is no more exports and no more money coming into the coffers. The few trillion they have won't go very far when the assets bubbles in China pop. Some economists are calling China the mother of all bubbles.
The manipulation has been by US officials, China just happened to gain export capability as a result, and will lose some if aloud to float up to correct equilibrium (desirable), plus things will go up if aloud, hence my comments on inflation, as china would still be one of the primary suppliers just less competitive.
Volume consumed would drop, over capacity seems a point we agree upon (Caused by excessive consumption US/GB) since when did we need a new car every 2 yrs. and other items.
My point is that overcapacity has been built up so if the U.S. goes down, it's taking the world with it and China will crumble with the rest.
Nobody has denied the Interconnectivity of the Global system however the US will go down as it will its consumption, but that consumption was spread all over the globe.
If the US goes down say 20% in total consumption and that equals x Trillion that will be spread around all trading nations for which the US has participated with. But a large part of that will be domestic, that which is offshore will be borne by Toyota, Sony and Honda in Japan, China, BMW & Merc in Germany, UK etc.
Thereby lets say 60% of x Trillion will be import spending all nations of the world will lose a share, most will not lose the same as the US's aggregate whole in % terms although China will be close and will probably try secure market elsewhere.
So Global Demand will be 'right sized' but remember those floated currency will have buying power they never had before remember Japan buying up New York and the Japanese tourist on every block, domestic bubble could deflate if capital can chase offshore in states for example.
So all nations of the world will carry the international element of the X trillion reduction in consumption Spread between them.
It may APPEAR that they are growing miraculously from the ashes and brink of depression, but they are printing money just like the west. Some of this money is feeding into the equity and land markets, which is almost identical to Japan pre-90s.
No long run growth rate of 8% is sustainable for ever, but remeber we are bringing a previously uninvolved 2/3 rds's of global population into the market economy for the first time in just Inda and China never mind Indonesia etc..
They are Smart, hard working and ready to do your job for less, the decline of american influence is inevitable.
Military, innovation/entrpreneurial mindset all the reasons I have heard are not changing that, whilst the world may go through pain with America they are in the eye of the storms path, they will come out smaller in the enlarged global society thereafter.
They were meant to become the no.1 economy then too.
