The only other possibility is that the rest of the world begins to dis-save massively--letting the US run a current account surplus--but that is highly implausible, and socially undesirable, since it means we export our economic output, rather than consume it domestically.
So why is this seen as the path to growth and prosperity by so many countries, rich ones like Germany and Japan included? Is it that claims on the rest of the world are naturally seen with suspicion while claims by the rest of the world on the US are safe and natural?
Strange lopsided thinking there... In the long run, we're all dead. John Maynard Keynes
Of course the US financial sector was only too happy to facilitate this process while they extracted fees and profited from "carry trades" made possible by the arrangement. And the financial sector's faithful servants, the mainstream economists, the mainstream media and most of the politicians, the people who are supposed to understand this stuff, kept reassuring the electorate that this was the result of US superiority and was the natural order of things. Religious leaders long ago learned the power of telling people soothing and reassuring things. Mainstream economics is just the new Church.
I recall a friend, who had a masters in economics and dropped out of a PhD program at UCLA in the 60s on account of a gag reflex problem, telling me in the '90s that us getting all of these products and other countries just accumulating US paper was like us just getting the stuff for free. That confounded me and didn't seem right, but I couldn't say why. Ignorant me. I didn't see how there would not be a price at some point. So now perhaps it was "prescient me."
All of these factors have been there in reasonably plain sight for years. Perhaps the take-away is that "connecting the dots is a non-trivial task and that ugly truths are only likely to be acknowledged in the face of ugly events, if then. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
