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California is experiencing a microcosm of the failure we all look forward to. As their credit rating is abysmal, they can't borrow to keep the band playing, like the US govt can from China. Otherwise, the problem is roughly the same.

The only difference is, when the U.S. govt starts handing out IOUs, everyone will know that there is no higher echelon that might step in and save the day. When the Treasury starts handing out IOUs, the whole world will recoil like we're passing out venomous snakes.

We're the horse that pulls the Chinese economy, so they don't want to let us go, but don't think that they won't if the numbers don't turn around. They'll cut their losses and bail if they think we're heading towards collapse or runaway inflation. It will put their economy into agony, but it will shatter ours. When that happens, we are all Californians. ;-)