At the end of World War I, the power shift of the world was clearly in the United State's favor, to which the United States was the most powerful economic force in the world, destined to become also the world's largest creditor nation, which simple stated meant that in aggregate the financial assets held by the United States were substantially greater than its liabilities to debtor nations. However, in the 1980s the United States crossed over from being a creditor nation to a debtor nation, and is currently the largest debtor nation in the world in aggregate and on a yearly continuing basis. This means that foreign investments in the United States exceed the American investments abroad. While in the short term this allows Americans to maintain their current standard of living, because we are being subsidized by foreign countries, in particular Japan and China, and their investment in us, over the long term, the debtor nation, no matter the size, must make good on their debts through greater productivity, frugality, or if they are unable to service their debt, than through outright default or the devaluation of its currency.
Despite its status as the world's largest debtor nation, the United States is able to currently have its cake and eat it too, because it remains the largest economic and the greatest strategic power in the world. However, this power is very slowly and inexorably beginning to erode and while today there is essentially no nation, or series of nations, that can dictate the terms of our debt, make no mistake about it, creditors are serious about collecting their debt, on their terms, not on ours. The debtor is always in thrall to the creditor, and any thinking to the degree, that the United States is too big to fail, too big to be dictated to, that the dollar is the de facto currency of the world by default and will forever remain that way, forgets that things change, and those that are not prepared to pony up to the table, will then find out sadly that the hand that they show down, is the losing hand, with all the attendant miseries of being a loser.
While America blithely goes about its business, as if nothing fundamental has changed, America's economic house has definitely changed and not for the better. In essence, foreign creditors to America have claim to assets that they control or own and if America is unable to make good on their debts, Americans cede control of these various resources to the creditor nations. Additionally, if America is unable to service its debts, than the dollar itself must become devalued, and America may also be put under financial restraints as dictated by creditor nations and the like.
None of this is even necessary if America simply righted its ship, but it seems not to have the moral makeup or suasion to do so. America wants to consume and purchase goods with perpetual IOUs to the world at large, without putting forth the labor to honestly earn its keep. The history of the world demonstrates that no nation has survived without struggle, America clearly has lost its way, and if Americans truly believe that they can continue to live this way, which is essentially off of the backs of Japanese and Chinese labor, dark days are coming.