I think there are two different arguments going on here, one is whether "communism" will inevitably fall and the other about whether the Soviet Bloc will inevitably fall.
I don't see that the second of those two things is inevitable, though a TL where the USSR survives into 2023 probably...
So wait, is California electing "Presidents" but not independent somehow? Or is this a situation where California is sovereign but part of some supranational *USA?
Probably because people tend to disagree over the definition of "utopia" a lot more than the reverse.
Personally, between a more social democratic America in general and accelerated technological development, I'd say this is a nice TL to live in so far, but some people would vehemently disagree...
Or if Wallace has the same "change of heart" that characterized his final term and somehow manages to bring enough of the Boll Weevils along in an Only Nixon sort of way.
Assuming the American economic recovery wasn't entirely fabricated, the material benefits to the rest of the world are such that I'm guessing most other nations are treating Renewalist America like the OTL CCP (or Putin pre-war) -- a combination of "Even if the elections weren't rigged, most...
Especially since we're probably due to elect one of the handful of "Anti-Administration" freedom fighters against the Lynn-tatorship which would be the ideal circumstance for a conspiracy theorist like RFK the Lesser to get in.
I also think that, unless Vidal sold off the whole damned Navy, the "sudden surge of foreign weapons" is National Union propaganda used to justify their reverses and covering up the reality that the US Army, already hollowed out and riddled with questionable loyalties, is now at "Russia 1918"...
I give it 50/50 odds that the next update is either "shameful surrender of half the country to fascists" or "Acting President Ripper wins the War by using All Of The WMDs."