I agree that it's an idiotic idea. First off, the most powerful countries (from before this stupid recession) are gonna have to share power with everyone else. Second, we have alot of third world countries and under-developed nations, most of which the able nations barely want anything to do with anyway, because it affects their image.
There is also the fact that the military accounts for many jobs, and without a military, you're looking at a few tens of million people jobless. Then you also take in people working in defense, weapons manufacturing and engineering, get rid of the foreign embassy's.
After this you have to deal with the language barrier. You have to deal with the mix of culture and religion. You have to deal with where people are gonna live, because, going back to the third world countries, they don't want to live there, they'd rather go live in industrialized nations, so there's a tighter squeeze on job and shelter and even foods and goods.
All and all, this doesn't work.