Many economic and political commentators are saying that America's best days are behind it. The federal debt has just topped $14 trillion, more than a million homes were foreclosed upon last year, and China is due to take its place as the world's biggest economy in a couple of decades.

There's no denying that America has some major problems. But try telling that to some of its major companies whose results are defying the doomsters' predictions!

Intel, the world's biggest manufacturer of microprocessors, reported record sales and profits for 2010 last Thursday. This was followed by JP Morgan posting a 48% rise in profits; far more than it earned in any of the boom years preceding the credit crunch.

The case against America
It's not exactly a secret that America has been on a consumption binge ever since the end of the Cold War. John Q. Public, having defeated the Soviet Union, went on a spending spree. Once consumers started treating their homes as cash machines, the personal savings rate fell below zero.

A large part of this spending has gone on imported Chinese goods. China recycled much of those proceeds into U.S. Treasury bonds. This depressed interest rates, which encouraged yet more consumption as well as providing fuel for a housing boom.

Many will argue that America has mortgaged its future to the Chinese and is settling for a long period of decline. I say look at the history books; this has happened before and it ended well for America.

We've been here before
In the 1970s and 1980s Japan, just as China does today, ran a large trade surplus with America and was the biggest buyer of U.S. Treasury bonds. When Japanese firms started purchasing trophy assets such as the Rockefeller Center and the Pebble Beach golf course, it was common to hear people saying that America's future was as a subsidiary of "Japan, Inc."

Then in 1990, Japan's bubbles in shares and property imploded, taking the Japanese economic miracle with them. The after-effects have consigned Japan to more than two decades of stagnation and today the Nikkei 225 is some 73% below its 1989 peak.

Bad demographics
Japan is now firmly in the grasp of some very nasty demographics. Longer lifespans, combined with falling birth rates, are rapidly increasing the average age of the Japanese population.

This in turn is hampering Japan's economic growth, placing immense demands upon Japan's pension and health-care systems, and is threatening its ability to service its debts. Worse still, Japanese public debt, as a percentage of gross domestic product (GDP), is more than twice that of America.

The more it changes, the more it stays the same
Albert Einstein defined insanity as doing the same thing over and over again and expecting different results. As noted earlier, China is doing the same thing Japan did in the 1970s and 1980s in running a huge trade surplus with America, buying lots of U.S. Treasuries to depress its currency while allowing a real estate bubble to build up at home. Why should things turn out differently this time?

China is also one step ahead of Japan when it comes to demographics -- it has been operating a "one-child policy" for more than 30 years. This all but ensures that China will suffer the same population problems as Japan is currently experiencing.

China could grow old before it becomes rich. Its huge population ensures that if and when its GDP exceeds America's, the GDP per person will still be low. In the meantime, China will have saddled itself with all of the problems of a top-heavy population pyramid without the first-world infrastructure that's needed to support it.

The case for America (and its companies)
America's population is still growing, in large part because of immigration, so it should manage to avoid Japan's fate. Its public debt, while higher than it has been for some time, is lower as a percentage of GDP than it was in most of the 1940s and early 1950s (when it did pretty well).

One of America's greatest strengths is how it assimilates immigrants, turning them into Americans, and this is best summed as what the writer J. Hector St. John de Crevecoeur called "the melting pot." After all, the motto on the Seal of the United States is E Pluribus Unum -- "Out of many, one." Good luck in trying to get China and Japan to resort to immigration to sort out their lopsided population

America is being fixed
America is now growing strongly. The CEO of Burlington Northern Santa Fe, a subsidiary of Berkshire Hathaway and the second biggest railway in America, said so last week; he expects the American economy to grow "in the high 3% range" in 2011. American railways move freight, not passengers, so their fortunes are closely tied to the economy as a whole -- which makes them a very good indicator. 

Boom and bust is as American as apple pie and baseball -- unfortunately many politicians and their media cheerleaders have a vested interest in making things seem worse than they are. Ignore them; the results of companies like Intel and JP Morgan tell you what's really happening. To paraphrase Calvin Coolidge, the business of America is still business.

As to the federal debt and budget deficit, Americans are increasingly exerting pressure upon their government to do something about it. The rise of the Tea Party movement is the most visible manifestation of this, and a recent poll by CBS News showed that more than 77% of American voters wanted to cut spending, while only 9% were prepared to raise taxes.

Never forget that America was born out of a protest against taxes and an overbearing central government. With all its faults I'd still rather have my money in America than in China.

Tony owns shares in Berkshire Hathaway. Berkshire Hathaway and Intel are Motley Fool Inside Value recommendations. Berkshire Hathaway is a Motley Fool Stock Advisorpick. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended buying calls on Intel. The Fool owns shares of Berkshire Hathaway and JPMorgan Chase and has a disclosure policy.