The U.S. Is Down, but Not Out

Despite difficult economic crises, America’s potential is unbroken. So why do doomsday prophets continue to prematurely proclaim America’s downfall?

The doomsayer’s projection stands because he will be proven correct in any case. It doesn’t matter which doomsday he predicts, whether of a ruling family, a state, an empire, an idea — he will prevail, because all historical phenomena end eventually. The deciding question is therefore not yet answered: When will this downfall actually come to pass?

The demise of the United States has been and will be a particularly common prediction. This began, at the latest, after the War of 1812, as the history-lacking upstart was credited with having little future in international politics. It continued after World War II, as the second superpower, the USSR, won the “space race” and saw a higher rate of growth for many years.

The prophets of doom and their predictions

Even in 1987, shortly before the collapse of the Kremlin power, American historian Paul Kennedy intoned a swan song for the U.S., which had overextended its power, in his epochal work, “The Rise and Fall of the Great Powers.”

In 1992, economic expert Lester Thurow wrote his bestseller, “Head to Head,” in which he describes a triathlon between the U.S., Europe and Japan. Thurow saw Europe, and above all Japan, at an advantage thanks to their government’s influence on business and industry.

Since 1998, Russian political scientist Igor Nikolaevich Panarin has received international attention for his books, essays and lectures wherein he prophesied civil war in the U.S. and the dissolution of the U.S. into four to six constituent states, as well as the return of Alaska to Mother Russia. The flaw: In his scenario, said the professor of the Diplomatic Academy of Moscow’s Ministry of Foreign Affairs, the chaos is set for Summer 2010. Yet despite the Wall Street debacle, the housing crisis and the tea party, there’s still no sign of disintegration of the U.S., even one year later.

Economic crisis is joined by military shortcomings

Nevertheless, the crisis is undeniable. The downgrade of the U.S. credit rating by the rating agency Standard & Poor’s was the result of the record level of public debt and the out-of-control budget. Because the U.S. economy is no longer internationally competitive, the export share of the traditionally negative trade balance continues to decline.

Economic crisis is joined by military weakness. The hostilities in Iraq are officially over, but in the war-torn and politically fractured nation, there can be no talk of “mission accomplished.” The death toll in Afghanistan rises as fighting continues, yet with the decided reduction of U.S. troops and the International Security Assistance Force, the return of the Taliban to power is only a question of time.

Moreover, the U.S.’ “smart power” diplomacy failed in its attempt to dissuade Iran and North Korea from their nuclear weapons programs. Even in the cultural landscape, the U.S. seems to have weakened. Bollywood, India’s film industry, produces more films and sells more tickets than Hollywood, the leading dream-factory of the twentieth century.

“Rise of the rest”: wages and wealth on the increase in China

The U.S. is experiencing an unprecedented downturn. But that in no way means that the superpower is facing its downfall. That applies to military operations: The U.S. will continue to be a part of every conceivable coalition of powers, thanks to the superior quality and quantity of their weapons systems. It applies equally on economic grounds: Indeed, just like Europe and Japan, the U.S. must accept the “rise of the rest” of the world, and share both markets and profits with China, India and Brazil.

In the globalized economy, above all, Asia has become the workbench for consumer goods of every kind, due to its low wages. Therefore, in the medium term, the U.S. will not be able to decrease its high unemployment, which particularly affects the poorly educated classes.

Certainly, prosperity and wages are increasing in China, too. Eventually, the producers of trade goods will shift their production facilities again. The U.S. has a good chance in the near future to once again become a center for international factories, because its populace is, comparatively, very well-educated and because English remains the lingua franca of international business. The great advantage for the U.S. lies in its sheer territorial size.

Even if the current population of 311 million increases, as forecast, by close to 100 million by 2050, the U.S. will have only about one-sixth of the population density of Germany. That is why the U.S. will remain attractive to young immigrants who stimulate the economy again and again, while an aging populace threatens the economic growth of Europe and China.

The U.S. remains the giant against which the world is measured

The U.S.’ greatest asset for future recovery lies in its political strength, and that is the living idea of freedom. The citizens of the new rival, of authoritarian China, will never develop a willingness to innovate similar to that of the people in a democracy. Under the pressure of the system, China’s factories can copy the old, but will rarely invent something new.

The U.S. remains the giant against which the world is measured. This giant is, in fact, tired — he even staggers. But he has not been overthrown. Even more important than its economic size is the quality of its universities, to which neither Europe nor China nor India come close. In nano- and biotechnology, the disciplines of the future, the U.S. rules the field.

Yet Americans need to restrain their ideologically radicalized, feuding parties and find pragmatic and painful solutions to their deep financial and economic crises. Moreover, they must accept that other powers have risen, and that work, prosperity and political and economic power will be redistributed.

The dominance of the U.S. is declining. But the U.S. will not completely disappear in the foreseeable future. The doomsayers will have to continue to wait.