On an admittedly very simplistic level, there is no global deficit, only balance. We owe, while China (or UAE or any other cash and/or resource rich nation) lends. If we default, our lenders’ wealth diminishes but the sum remains the same as our debts get written off.

It’s resources you should be focused on. When the rate of asset consumption exceeds the capacity for asset creation, then the global economy must go into reverse. Again a simplification.