I am more of a "don't bet against America" person than a "We Are Doomed" person, but I know my thoughts are based on past performance and not necessarily future returns.
Drudge has "IMF: AGE OF AMERICA NEARS END" blazing from the title-bar this AM, but the "end" is something that can come in many flavors; relative and real.
The relative decline has to do with the fact that the rest of the world continues to recover from war, Communism, and hard Socialism. Their economies grow and as a percentage of the world GDP, ours shrinks as a percentage. That isn't all that bad.
China's population is over 4-times ours - so it only makes sense that as they abandon Communism they will return to their historical place in the world's GDP and Asian power structure.
The relative is beyond our control and on balance is a positive. The real decline is another thing.
Economically, the USA has lost its way through sloth, laziness, and a political system that had both sides lying to its public not unlike other Western European welfare states that we tried so hard to copy. From Britain to Greece, they are just 5-10 years ahead of our coming economic train wreck. If we were smart, we would see and modify our behavior in time. 2010 election was a start, but I don't know if we will have the follow-through to fix it when the pain is small vice later when the pain will be almost unbearable.
The problems are huge. Too few people pay Federal taxes. The Federal tax system we have is little more than a CPA and Tax Lawyer full employment system. We have some of the most anti-business tax policies in the Western World. We are quickly dividing into a class system; those who live off tax dollars and those who provide tax dollars. The public servants are starting to feel they are the public's overlords.
Enough of my prattle - here are some pull quotes from Brett Arends at MarketWatch.
The International Monetary Fund has just dropped a bombshell, and nobody noticed.Read it all and get sober. We are doing this to ourselves and most of the problem derives from our greed and desire for other people's money.
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
And it’s a lot closer than you may think.
According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.
Put that in your calendar.
We have lived in a world dominated by the U.S. for so long that there is no longer anyone alive who remembers anything else. America overtook Great Britain as the world’s leading economic power in the 1890s and never looked back.
And both those countries live under very similar rules of constitutional government, respect for civil liberties and the rights of property. China has none of those. The Age of China will feel very different.
Victor Cha, senior advisor on Asian affairs at Washington’s Center for Strategic and International Studies, told me China’s neighbors in Asia are already waking up to the dangers. “The region is overwhelmingly looking to the U.S. in a way that it hasn’t done in the past,” he said. “They see the U.S. as a counterweight to China. They also see American hegemony over the last half century as fairly benign. In China they see the rise of an economic power that is not benevolent, that can be predatory. They don’t see it as a benign hegemony.”
What the rise of China means for defense, and international affairs, has barely been touched on. The U.S. is now spending gigantic sums — from a beleaguered economy — to try to maintain its place in the sun. Pentagon spending is budget blind spot .
It’s a lesson we could learn more cheaply from the sad story of the British, Spanish and other empires. It doesn’t work. You can’t stay on top if your economy doesn’t.
The U.S. Treasury market continues to operate on the assumption that it will always remain the global benchmark of money. Business schools still teach students, for example, that the interest rate on the 10 Year Treasury bond is the “risk-free rate” on money. And so it has been for more than a century. But that’s all based on the Age of America.
No wonder so many have been buying gold. If the U.S. dollar ceases to be the world’s sole reserve currency, what will be? The euro would be fine if it acts like the old deutschemark. If it’s just the Greek drachma in drag ... not so much.
The last time the world’s dominant hegemon lost its ability to run things single-handed was early in the past century. That’s when the U.S. and Germany surpassed Great Britain. It didn’t turn out well.
Though I had a falling out with her a couple of years ago, in this area I agree with Peggy Noonan. You know my call for years for us to withdraw almost all our maneuver forces from garrisons around the world starting with Germany, Korea and Japan. Re-center our military to a "US based with global reach" posture. There are many reasons for this. Peggy hits on one of them,
We have work to do at home, on our culture and in our country.In any event - as Libya is showing us, we no longer have leaders who want to lead on a global scale - and allies who want us to do all their heavy lifting for them when they can afford to do it themselves.
I am tired of being the world's sucker. We are threadbare, shopworn, and hopefully understanding more the wisdom of our Founders when it comes to global entanglements. WWII was good. The Cold War was good. Proactive defense and score settling after 9/11 is good.
Enough. Let others fight their wars and pay for their defense; help but don't enable dependence. Let those who don't want freedom wallow in squalor until they decide to fix themselves. When non-state actors threaten us - kill them and destroy their property where ever it may be, and do it without apology, excuses or permission from international organs who have no standing in US law or moral position to preach to anyone. Pay off our debts so our children won't. Welcome China's rise and greet them on the global marketplace as we rebuild our strength.
This will take many years and many election cycles. Our politicians represent us - don't forget that.
Elections have consequences. One election won't fix this. Our yard has gone to seed as we focused our advice and time on our neighbors' yards. Time to look very hard at ourselves. We've fixed ourselves in the past - we can do it again - but it won't happen without work.