The American system has problems, but those problems do not make up the Big Problem in dealing with China. The big problem for the United States in dealing with China... is China.
Internal improvements and reforms are clearly worthy goals, but they don't change the underlying picture. The Littoral Combat Ship may be a punchline, but the hypothetical alternative of a well-conceived and well-executed frigate program doesn't do much to move the needle either. In the evolving balance of power between the United States and China, the pivot point lies well west of Hawaii. It's China that has changed in recent decades, China that is changing today, and China that has the greater capacity for future change, at least in the medium-term. What is or isn't happening in the United States is important, but it is decidedly secondary to what is or isn't happening in China.
Of course, there is always the dream of obtaining technological advantages that both (a) translate to a decisive edge in national capabilities and (b) cannot be replicated by the adversary within a reasonable timeframe or at scale (see: VLO), but the prospects for such things are limited and diminishing.