That could have potentially worked in a world where the world opinion of the US was favorable. Heck it's not even the world opinion, it's the other countries which hold substantial amounts of the US debt. I think that Japan would go along with it, but unfortunetly I don't think that you will see any EU member nations go with that plan, they simply put are not happy with us and regardless of your personal opinion of them, they do matter when it comes to matters of international finance. I think that the country's credit rating would drop into the garbage. The ramifications would be felt for years possibly 10's of years.
I don't know. Even though we aren't as productive as we used to be, if we did have to go to war with China, and a lot of our resources were shifted to that war, things like the aid we give to other countries, the food we sell worldwide (we are still the largest supplier of food to the world, right?), and the sheer force of America gearing up for a new BIG war will make the rest of the world think "now do we want this to go on for a long time by sitting out, not getting anything from America, or should we jump in and get this over with ASAP?" I for one still have faith that America will be helped out, maybe just to get the world back to status quo.
If it comes to it, think the rest of the world would choose a future dominated by China just because they don't like us much? I doubt it. If the sh*t hits the fan, they'll run to us for protection as fast as they can. Unfortunately, they won't be able to help us much.