The markets were closed because of critical telecommunications failures. To quote one site: NYSE facilities and remote data processing sites were not damaged by the attack, but member firms, customers and markets were unable to communicate due to major damage to the telephone exchange facility near the World Trade Center. (http://www.answers.com/topic/september-11-attacks)

It was difficult given the general confusion at the time and restricted air travel to restore communications. That accounts for a significant amount of the delay.

A detailed response from the library of the University of Edinburgh reveals that no such quotation appears in the library's holdings of books by Tytler.

Edinburgh University Library occasionally receives enquiries, particularly from North America, about this particular work. However, this title is not in our Library holdings, nor does it appear in the stocks of the other major research libraries in the UK (according to the 'union' catalogue COPAC)…
Locally, the chapters of Tytler's General history … (which we DO have) has been checked on the off-chance that The decline and fall might have been a chapter title… but it is not…

The librarian, being a librarian, covers his backside when he writes this:

Often in the enquiries we receive we are provided with a 'quote' (see below) from Tytler referring to the steps that a democracy can go thro' prior to its fall but this is not in the General history… either.
We have scanned our holdings pretty thoroughly on different occasions, going back a few years now, but we have not found the quotation or anything similar to it, but we cannot absolutely rule out the possibility that we have missed it.

He goes on to say that the U.S. Library of Congress has found no such quotation in its collection of books by Tytler.

'A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.'

'A democracy will continue to exist up until the time that voters discover they can vote themselves generous gifts from the public treasury.'

'From that moment on, the majority ALWAYS vote for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.'

'The average age of the world's greatest civilizations from the beginning of history, has been about 200 years'

'During those 200 years, those nations always progressed through the following sequence:

1. from bondage to spiritual faith;

2. from spiritual faith to great courage;

3. from courage to liberty;

4. from liberty to abundance;

5. from abundance to complacency;

6. from complacency to apathy;

7. from apathy to dependence (current phase of America);

8. from dependence back into bondage'

I'm not certain of all your conclusions but I think you are on to something here. As a US Historian (major foci: labor, immigration, social history — which of course includes a bit of economic history) I'm of the opinion that what the US and other Western countries have done in the past couple of decades will ultimately hurt the economy far worse than we have yet seen. Historically, markets must go through swing periods – call them depressions, recessions or even "market corrections". They are part of the "natural order" if you will. By artificially trying to stave them off or to force a positive correction too soon will ultimately create a far worse condition when it does hit. Now, of course as a long-term investor – I have to hope that I am wrong. I hope that the governmental actions will provide the catalyst to keep the economy growing. But I do look at the long-term cyclical patterns and wonder how much longer before we have a major crash – one that will be truly reminscent of the 1929 crash or the crash in the 1880s or the crash following the US Civil War or the crash in the 1820s and so forth going back in time.

I don't see your scenario for China. Forget the continuously faked numbers from China's government. What's GDP got to do with anything? The real number is or will be closer to 4% than 9% next year. It is and always has been about jobs in China. As the manufacturing base continues to close down, and people are put out of work without government support programs, rioting will occur throughout the country. The Chinese government will up the rhetoric as to why this is the fault of the US to quell their people's anger along with their usual mass killings. When we come out the other end in 2013, the Chinese peoples will hate the US!