America's Diminishing Fortunes

This is from Financial Armageddon -- follow link to original.

I do not always agree with his views -- but this is an interesting look at our current plight.

Personally, I think a willingness to reform our Financial Sector, along with a sensible cutback on defense spending would go a long way to solve some of our most pressing problems. The resources are there -- we are just not willing to use them for anything resembling "the common good". In that sense, we have truly lost our way.

Coincidence, Campaign, or Meme?

I'm not sure whether it is a coincidence, an orchestrated campaign, or a meme that is gaining traction, but three sobering commentaries on America's diminishing fortunes have popped up over the past few days:

"Bankrupt Empire" (Doug Bandow, National Interest)

The United States government is effectively bankrupt. Washington no longer can afford to micromanage the world. International social engineering is a dubious venture under the best of circumstances. It is folly to attempt while drowning in red ink.

Traditional military threats against America have largely disappeared. There’s no more Soviet Union and Warsaw Pact, Maoist China is distant history and Washington is allied with virtually every industrialized state. As Colin Powell famously put it while Chairman of the Joint Chiefs: “I’m running out of enemies. . . . I’m down to Kim Il-Sung and Castro.” However, the United States continues to act as the globe’s 911 number.

Unfortunately, a hyperactive foreign policy requires a big military. America accounts for roughly half of global military outlays. In real terms Washington spends more on “defense” today than it during the Cold War, Korean War and Vietnam War.

U.S. military expenditures are extraordinary by any measure. My Cato Institute colleagues Chris Preble and Charles Zakaib recently compared American and European military outlays. U.S. expenditures have been trending upward and now approach five percent of GDP. In contrast, European outlays have consistently fallen as a percentage of GDP, to an average of less than two percent.

The difference is even starker when comparing per capita GDP military expenditures. The U.S. is around $2,200. Most European states fall well below $1,000. Adding in non-Pentagon defense spending—Homeland Security, Veterans Affairs, and Department of Energy (nuclear weapons)—yields American military outlays of $835.1 billion in 2008, which represented 5.9 percent of GDP and $2,700 per capita.

Max Boot of the Council on Foreign Relations worries that the increased financial obligations (forget unrealistic estimates about cutting the deficit) resulting from health-care legislation will preclude maintaining such oversize expenditures in the future, thereby threatening America’s “global standing.” He asks: Who will “police the sea lanes, stop the proliferation of weapons of mass destruction, combat terrorism, respond to genocide and other unconscionable human rights violations, and deter rogue states from aggression?”

Of course, nobody is threatening to close the sea lanes these days. Washington has found it hard to stop nuclear proliferation without initiating war, yet promiscuous U.S. military intervention creates a powerful incentive for nations to seek nuclear weapons. Armored divisions and carrier groups aren’t useful in confronting terrorists. Iraq demonstrates how the brutality of war often is more inhumane than the depredations of dictators. And there are lots of other nations capable of deterring rogue states.

The United States should not attempt to do everything even if it could afford to do so. But it can’t. When it comes to the federal Treasury, there’s nothing there. If Uncle Sam was a real person, he would declare bankruptcy.

"Graceful Decline" (Christopher Layne, The American Conservative)

The end of Pax Americana

The United States emerged from World War II in a position of global dominance. From this unparalleled military and economic power came a Pax Americana that has endured for more than six decades. It seemed the sun would never set on the U.S. empire.

But America is increasingly unable to play the hegemon’s assigned role. Militarily, a hegemon is responsible for stabilizing key regions and guarding the global commons. Economically, it offers public goods by opening its domestic market to other states, supplying liquidity for the world economy, and providing the reserve currency. A hegemon is supposed to solve international crises, not cause them. It is supposed to be the lender of last resort, not the biggest borrower. Faced with wars it cannot win or quit and an economy begging rescue, the United States no longer fits the part.

Still, many in the mainstream foreign-policy community see these as temporary setbacks and believe that U.S. primacy will endure for years to come. The American people are awakening to a new reality more quickly than the academy. According to a December 2009 Pew survey, 41 percent of the public believes that the U.S. plays a less important and powerful role as a world leader than it did a decade ago.

The epoch of American dominance is drawing to a close, and international politics is entering a period of transition: no longer unipolar but not yet fully multipolar. President Barack Obama’s November 2009 trip to China provided both substantive and emblematic evidence of the shift. As the Financial Times observed, “Coming at a moment when Chinese prestige is growing and the U.S. is facing enormous difficulties, Mr. Obama’s trip has symbolized the advent of a more multi-polar world where U.S. leadership has to co-exist with several rising powers, most notably China.” In the same Pew study, 44 percent of Americans polled said that China was the leading economic power; just 27 percent chose the United States.

Much of America’s decline can be attributed to its own self-defeating policies, but as the U.S. stumbles, others—notably China, India, and Russia—are rising. This shift in the global balance of power will dramatically affect international politics: the likelihood of intense great-power security competitions—and even war—will increase; the current era of globalization will end; and the post-1945 Pax Americana will be replaced by an international order that reflects the interests, values, and norms of emerging powers.

China’s economy has been growing much more rapidly than the United States’ over the last two decades and continues to do so, maintaining audacious 8 percent growth projections in the midst of a global recession. Leading economic forecasters predict that it will overtake the U.S. as the world’s largest economy, measured by overall GDP, sometime around 2020. Already in 2008, China passed the U.S. as the world’s leading manufacturing nation—a title the United States had enjoyed for over a century—and this year China will displace Japan as the world’s second-largest economy. Everything we know about the trajectories of rising great powers tells us that China will use its increasing wealth to build formidable military power and that it will seek to become the dominant power in East Asia.

Optimists contend that once the U.S. recovers from what historian Niall Ferguson calls the “Great Repression”—not quite a depression but more than a recession—we’ll be able to answer the Chinese challenge. The country, they remind us, faced a larger debt-GDP ratio after World War II yet embarked on an era of sustained growth. They forget that the postwar era was a golden age of U.S. industrial and financial dominance, trade surpluses, and persistent high growth rates. Those days are gone. The United States of 2010 and the world in which it lives are far different from those of 1945.

"The Death of the American Century" (Henry Allen, The Washington Post)

The dream is dying.

It was this: a belief that the world has a special love for Americans, for our earnest innocence and gawky immediacy, for our willingness to share the obvious truth and light of democracy with people still struggling in the darkness of history, for our random energy, syncopated music and lopsided, baseball-playing grins. Throw in a little purple mountains' majesty and amber waves of grain, and you get the idea.

It's hard to say just when the dream was born. With Teddy Roosevelt's Great White Fleet circling the globe? With Woodrow Wilson's war to make the world safe for democracy? In 1940 Henry Luce, who told Americans who they were each week in Time and Life, proclaimed "The American Century." World War II made it come true.

I acquired the dream from newsreels and Life magazine after World War II when I saw shots of the French and Italians throwing flowers at our troops as we freed them from the Nazis, GIs coming home with war brides, German children staring up from rubble to cheer the American planes bringing them food in the Berlin Airlift.

I was quite young -- born in 1941 -- but old enough to hold these truths to be self-evident: We didn't conquer; we liberated. We were always the good guys. We wore the white hats. Despite their grousing about uncultured big-foot Yankees, everyone else secretly wanted to live like Americans. When they threw flowers they were our friends, not collaborators like those French women whose villages shaved their heads when their German boyfriends left a step ahead of the Americans. The women stayed behind, of course -- nobody wanted to be a Nazi war bride in postwar Germany.

They lost, we won. Nothing makes friends like total victory, the kind we don't even hope for anymore. Why, in twice-nuked Japan, boys took up baseball.

America was going to run the world, not for America's good but -- for the first time in history -- for the world's own good.

What a wonderful dream! It took some hits, but it survived our stalemate in Korea, our utter failure in Vietnam, our retreat from Lebanon, our Blackhawk Down catastrophe in Somalia.

It survived us making fools of ourselves when our Iranian hostage rescue foundered in dusty desert chaos without an enemy shot being fired. We couldn't even bring back all our dead for burial.

We bombed a mental hospital in Grenada while freeing the world from some vague Communist menace. We bombed an ibuprofen factory in Africa in retaliation for an attack on our Nairobi embassy. We bombed the Chinese Embassy in our air war to liberate Kosovo. The dream even survived George W. Bush launching a war to rid Iraq of weapons of mass destruction.

Now, though, things are different.

There is no special love for us. We have our unique virtues, and we have come closer than any other nation to fulfilling Jesus's command to love our enemies. But we are awakening from the dream.

Still, we cling to it. John Kennedy promised that we would pay any price, bear any burden to make it come true, and Ronald Reagan called us "a city on a hill," with the eyes of the world on us. Obama thrills audiences when he soars into his messianic world-saving rhetoric.

By now, it's as if we wouldn't be America without the dream, and a candidate couldn't win the presidency without believing in it.

Yet Capt. Mark Moretti, commander of our forces in the Korengal, put it this way: "I think leaving is the right thing to do."

The dream is dying. No resuscitation, please.