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The Decline of America

The first anniversary of the war in Iraq has arrived, and America's reputation continues to sink. One year ago, the US tried to bully the world into supporting an unprovoked war, claiming that anybody who didn't believe in Iraq's weapons of mass destruction was either a fool or an accomplice of terrorists. Now we know that the US government and its few allies were themselves either fools or liars. But this has not stopped the Bush administration's thuggish behavior.

The US could be a great force for good. Studies like one by the World Health Organization's Commission on Macroeconomics and Health show that with an $11 trillion dollar annual national income, America could finance the control of AIDS, malaria, tuberculosis, and many other killer diseases for a small fraction of the money it wastes in Iraq. Instead, US financial assistance to the world's poor countries as a share of national income is the lowest of any donor country.

The US can also be a force for great ill. America's military budget is currently about $450 billion, roughly equal to the rest of the world's combined military spending. The Bush Administration believes that US military power buys security, even though terrorism has increased since the Iraq War.

But despite its wealth and military might, America's ability to project political power - for good or ill - will decline in future years, for at least five reasons:

  • America's budget is in crisis. Thanks to Bush's tax cuts and military spending, which have contributed to budget deficits of $500 billion per year, the US will have to raise taxes and limit budget spending, whether or not Bush is re-elected. The annual military budget, which has increased by $150 billion since Bush took office, will need to be cut in coming years to get the budget under control;
  • The US is borrowing massively from abroad. Asia's central banks have bought hundreds of billions of dollars of US securities. Japan alone has foreign exchange reserves of around $750 billion, much of that in US treasury bills. China, Hong Kong, India, Korea, Singapore, and Taiwan together have another $1.1 trillion or so in reported foreign exchange reserves. In short, the US is in deep and growing debt to Asia. Only massive buying of treasury bills by Asian central banks has prevented the dollar from falling even more precipitously than it has;
  • The rest of the world is catching up. America's big technological lead will narrow relative to Brazil, China, India, and other major economic regions of the developing world. China will have an economy larger than the US economy within 25 years - potentially 50% larger by 2050. India, considerably poorer on average than China, will also close the wealth gap. By 2050, India will conceivably have an economy the size of America's, with four times the population and roughly one-fourth of the average income level per person;
  • A narrower economic gap will reduce America's relative geopolitical power. China and India, which together account for about 40% of the world's population, will begin to play much larger roles on the world scene. The current xenophobic reactions to "outsourcing" of jobs to India's software engineers ­- a hot political issue in the US - reflects the underlying anxiety of a US population that wants to stay in the economic lead. With or without American protectionism, Asia's technological capacities and incomes will grow. This will be good for the world because prosperity will be more widely spread, even if America's ego gets hurt in the process.
  • Demographics will weaken America's militaristic approach to the world. Much of Bush's support comes from white fundamentalist Christian men. This, in my opinion, is a social group that is fighting a rearguard battle against the growing social power of women, immigrants, and other religions. It is also fighting against secularism, such as the teaching of modern biology and evolutionary theory. The religious right's backward-looking agenda - and the Manichaean worldview that underlies it - is doomed. The US Census Bureau recently found that by 2050, the non-Hispanic white population of the US is likely to be only half of the total US population, down from 69% currently. By 2050, 24% of the population will be Hispanic, 14% will be African-American, and 8% Asian. The US will look more like the world, especially Latin America.