Maggie's Farm

I don't worry about China and India, for a variety of reasons. First off, both had massive savings levels, which they are now burning down. We SHOULD take advantage of that, but we're not, because our corporate management would rather pay themselves fat packets than build healthy, highly productive manufacturing centers. US workers produce many times the amount of their rivals - so paying them more should be easily recouped.
Secondly, China is spending quite a bit in useless, government mandated ways. We've seen this before, from Japan in the 80's (um, and us right now). It rarely leads to long term benefit. Empty cities in the Mongolian desert? Hardly useful and productive. Stadiums that fall down? Not really a terrific investment.

As long as we start being more careful with our money, and spending it productively, then we'll be fine. That's what recessions - even big ones - are for. To bring us back to reality.

We've spent 20 years AVOIDING big recessions just to keep the gravy train going. It was unhealthy. We're paying for it now.