After the separation

China and the U.S. are joined at the hip - financial siamese twins. China must keep buying U.S. Treasury bills in order to prop up its exports; the U.S. must keep selling China those Treasury bills in order to fund our massive deficit.

Eventually, this has to stop. When it does, U.S. borrowing costs (interest rates) will soar, and Chinese exports will crash (even more than they are currently crashing). That will leave the U.S. with a massive overhang of unpayable debt, and China with a massive amount of unused productive capacity.

We will both suffer in the short term. But in the long term, which of those two position would you prefer to be in, if you had a choice? A bunch of debt, or a bunch of factories?

In any case, barring the possibility of violent revolution, China has successfully neutralized its only peer competitor among the great powers of the world - not through military conquest or intimidation, but by the simple trick of lending us money that they knew we'd be too greedy and short-sighted to pay back. Thanks to Ronald Reagan, George H.W. Bush, and George W. Bush, China runs the world now. Thanks, guys.