So when will the actual election start?
Define "election". If you mean "when do they start campaigning", then probably January 2009. If you mean "when can people vote", I think that's November next year - an American can probably give you the exact date.
America is still the world's strongest power, on practically every scale
I'm not too sure about that to be honest. Their political weight has been subdued a lot lately, especially with the "last minute" agreement on raising their debt ceiling. That made a lot of countries a little annoyed as it seemed like America was just a big child stamping its foot. Their involvement in Libya wasn't as great as it could have been, they took much more of a back seat in that. Now you're pulling out of Iraq whilst other allies are still there. America's power is failing and, to be honest, I would say China is the world's most powerful at the moment. Just look at their stance on Libya, a lot of countries decided not to get involved because China was the first to say "no, we don't want to". China also holds a darn lot of American debt (as you noted), as well as debt in many other countries. They've also offered to put up money for the Euro crisis. So what they say has a lot of weight from intimidation in Europe and a lot of weight from admiration in Asia. Their military is probably just as well armed as the American military, except they have the funds to be able to deploy it if they wanted to.
But yeah, they're still one of the strongest and always will be - the geographical & population size of the country is too great for it not to be an important player in the world.
Or default, of course. Which, while it many ways it would be catastrophic (especially in terms of what it would do to US retirement funds and pension plans, and Chinese ones), most research has suggested that defaulting on debt in large economies with market power, especially if followed by credible policy change, has comparatively small side effects (comparatively, of course, referencing hypothetical costs of paying the pre-default obligation plus future interest).
Possibly missing out the psychological effects though. Americans come across as very patriotic, much more so than most of the world (let's not get into who is and isn't patriotic though). That level of faith in their country on being "the strongest" in the world would leave ordinary people devastated should the US ever default on its debts. Suddenly the great nation isn't so great, it can't live up to its promises. I would expect that to have a great effect on the ordinary man or woman. So whilst policy changes might aid a default the effects on the people would be felt for many years to come and, whilst I can't find evidence to back this up, I would suspect that it would effect peoples' ability to get themselves out of any holes they may have gotten in to.
