What you are missing is that we have most certainly NOT embarked on the largest military buildup in history. We have less ships, less men under arms, less aircraft and less nuclear deterrent. The trend over the 30 years has been disarmament.
We have newer technology, but a lot less of it and it costs a lot more and may not be as "unassailable" as we want to imagine when faced with a truly committed foe (hint: Iraq wasn't).
Other than those minor points, your reasoning makes perfect sense.
... and does anyone doubt that China is a strong, able, willing country that (possibly) (likely) would move on the US if weakness is seen or suspected ... ?
"Speak softly and carry a big stick" ... is still an excellent philosophy.