I'd like to share with you some thoughts I offered subscribers of my Income Investor newsletter. In short, while I believe we've got work to do as a nation, I also believe in the U.S.

Prominent bond fund manager Jeff Gundlach said recently that he believes the U.S. will default. That's a big bite to chew, but it's a thought that has crossed many an investor's mind. I'm not in favor of excessive leverage, and I do believe we need to prudently monitor our debt (as our debt is, by definition, someone else's savings). I don't like paying off old bonds with new ones, but I'm not panicking just yet. We're still the world's leading economy -- and its No. 1 manufacturer as measured by output. Industrial giants General Electric (NYSE: GE) and 3M (NYSE: MMM) are still powerful forces in the global economy. Aerospace leader Boeing (NYSE: BA) stands with Europe's Airbus as part of the long-standing duopoly in large commercial aircraft construction. Even machinery companies like Deere (NYSE: DE) have spread out around the world to open new markets. So I believe the following logistics are in our favor:

  1. For a currency to have the honor of being a reserve currency, as ours is, its issuer must be a net borrower. In other words, we borrow because we need money, but people also want our dollars.
  2. With sovereign borrowing more so than with corporate or individual borrowing, credibility is currency. As I often say on our Motley Fool Money radio show, the U.S. may be a drunk driver on the road, but it's still the least-drunk driver. Would you rather have someone else's national debt?
  3. If anything were to happen to jeopardize that status, such as the gradual loss of U.S. hegemony, and hence its reserve-currency status, it would likely occur over a long time. Japan has been battling deflation for the better part of two decades, and China only recently overtook it as the world's second-largest economy.

My biggest concern is with that last point. The rosy optimists point to 20th-century data to illustrate that despite periods of high war debt, the U.S. made it through just fine. True, but the 20th century also saw the U.S.'s unprecedented rise to a global superpower. Will it always be that way?

I believe the ultimate solution rests not with American government, but with American business. As long as we continue to lead the globe in corporate governance, transparency, and productivity, we'll have the ingredients to remain the leading -- and most credible -- economy in the world.

Or at least I sure hope so. But what do you think?

James Early owns no stocks mentioned in this article. You can investigate his Motley Fool Income Investor newsletter free for 30 days. 3M is a Motley Fool Inside Value recommendation. The Motley Fool has a disclosure policy.