Why America Will Remain the Superpower

http://online.wsj.com/article/SB122394103108030821.html

by robg • 18 years ago

42 68 18 years ago

online.wsj.com

swombat2• 18 years ago

Good arguments. I think there's a bit of a bandwagon of schadenfreude whenever things go badly, and people begin to outdo each other in dire and gloomy predictions of the world's end.

In my very first job, I got used to the idea that somebody, somewhere in the project, feels that the sky is falling and the project's about to end - on practically a weekly basis. Yet the project went on. Human activities have a huge intertia, and the "economy", and the "world order", are merely a collection of human activities with some system applied on to help keep track of what's going on (and, ideally, help it go even better).

Things change, but ever so slowly.

Retric4• 18 years ago

I am 28 with a reasonably well paying job and a small investment in the stock market. As the market falls all I can think about is how much I can buy while it's down. What people forget about is the value of a stock or home is only indirectly related to it's price, there are a wide range of companies in great shape that have tanked.

Long term I think the US GDP is limited by our lack of investment in basic infrastructure. But when you look at the "real" economy things are still looking good. It's going to be interesting seeing how many baby boomers retire and how many are going to wait until the market recovers. But, I think people pulling money out of the market is going to help keep the market realistic for the next few years. (Good for me but bad for the old people.)

bayareaguy• 18 years ago

"To those of you all excited about buying on the dip"

http://www.winterspeak.com/2008/10/japan-experience.html

dejb9• 18 years ago

I think people from the US need to understand that when you argue that it is right for you to be 'the superpower' you are also arguing that the rest of the world should be subservient. Can you see how that sounds to the rest of the the world? If there is any schadenfreude going on that would be the reason.

iigs• 18 years ago

Who thinks or argues that it's "right"? As an American, I think we've been on a hell of a ride for the last couple hundred years, and I'm quite thankful for that.

I personally feel do not feel owed anything. I just hope if we're on our way down that we don't piss off enough other countries that {we, our children, our grandchildren} have it harder than it has to be when the tables are turned.

anamax7• 18 years ago

> when you argue that it is right for you to be 'the superpower' you are also arguing that the rest of the world should be subservient.

Small problem, we're not arguing that it's right. And we're not arguing that you should be subservient, but we'll get back to that bit of projection a little later.

We don't argue that it's right, but let's look at the alternatives. China? Russia? The EU? No one? Yeah right.

Speaking of the EU, we've seen them in action. It's not clear that they're the best of that sorry bunch. We all know that if the US announced "hey, you're right, we're just here for the oil, so we're going to redeploy to cover what we need and let you take care of the rest", they'd be running troops into Iraq as fast as they could get transport from the Russians. (They really ought to have some ability to project force.) Then we'll see how Euros run an occupation. Most folks think that Germany is the most brutal, but I've got my money on France.

As a superpower, the US is basically a resource. Whenever something big needs doing, the question is "how do we get the US to do it?" If you don't like that deal, find a better one and take it. We won't be offended.

We don't want you to to be subservient. That's how the alternatives work. (Yes, I'm including EU and subdivisions.) Instead, we think that your responses when you ask us to do something should show some class. They should fall into two categories (1) "thank you" with as much "how can we help" as you can afford and (2) "on second thought, don't bother, we'll do it ourselves". And, we should hear the second a lot more from the EU. After all, 500M people and more GDP than the US should allow you to do most things on your own. (All that wealth and we had to handle your USSR problem....)

Yes, in some ways we do look down on you. It's because you're Monday morning quarterbacks. You want respect - get on the field. Surely there are some problems that you can handle. Show us how it's done.

BTW - We know that you're talking smack because you're not afraid of anything these days. We also know that that will change when you are.

Speaking of "sophistication", it's somewhat ironic that our subprime mortages had a bigger effect on your banking system. We're stupid, so we're supposed to get conned. What's your excuse for getting taken by rubes?

swombat2• 18 years ago

people from the US need to understand that when you argue that it is right for you to be 'the superpower' you are also arguing that the rest of the world should be subservient

I'm not American. Not one bit.

Except in the sense that we in the western world are all americans to some extent.

Also, although America may not be very good at holding up to its own promise, at least it symbolises freedom, democracy, etc. If America's not the superpower, who do you suggest? China? Russia?

America may have flaws, but, like capitalism and democracy, it's still better than the alternatives.

michaelneale• 18 years ago

> I got used to the idea that somebody, somewhere in the project, feels that the sky is falling and the project's about to end

yes I go through that on a weekly basis. Its mild manic depressive, but you can ignore people like me. Fight on.

shawndrost2• 18 years ago

I was interested in this quote: "[T]he ratio of government debt to GDP in the U.S. runs to about 62%. For the eurozone, it's 75%; for Japan, 180%." Reddit would have you believe that we're some kind of wacky money-pissing outlier, but we seem to be doing all right.

Wikipedia's list of countries by public debt is interesting: I see no correlation between rank and economic strength. Also curious: there are no countries with negative net debt, so why isn't the circular debt resolved? Maybe the countries are diversifying their portfolios? http://en.wikipedia.org/wiki/List_of_public_debt

Retric4• 18 years ago

Most countries have far more assets then debt so if you try and balance them it's going to look vary strange. Which is why people just look at the debt and ignore cash on hand.

hugh• 18 years ago

Most (?) government debt isn't held by other governments, it's held by individuals, in the form of bonds. Hence, all governments can be in debt.

About twelve years ago the Australian government (having just changed hands) embarked on a campaign to pay back government debt, which back then was quite high. Now it's almost all paid back (just 15% of GDP left) but as I understand it they want to maintain some level of debt -- otherwise the whole Australian bond market would cease to exist.

shawndrost2• 18 years ago

Interesting: only 25% of our debt is held by other nations [1]. Still, the point stands: Japan owns a half-trillion in US bonds, but has a massive national debt of their own. Essentially, they're buying US bonds by selling their own bonds.

[1] http://en.wikipedia.org/wiki/United_States_public_debt#Forei...

netcan5• 18 years ago

Australian Government actually has quite a bit of surplus saved up by the previous government during the resource boom. They've now announce they're gonna spend it.

ars2• 18 years ago

A little tip on reddit: Everything it says/believes - exactly the opposite is true. I've never seen it fail.

It's become the cesspit of the internet.

There are sites that have more nonsense (4chan for example), but they know it's all jokes. Reddit actually takes itself seriously, and has no idea just how full of nonsense it actually is.

pg2• 18 years ago

"Constantinople fell to the Ottomans after two centuries of retreat and decline."

More to the point, after cannons were invented.

mattmaroon3• 18 years ago

Isn't the rise and fall of most of the large empires due to better weapons technology?

bbgm• 18 years ago

One reason the British Empire went down cause it became too difficult to sustain, both globally and internally

papersmith• 18 years ago

That was certainly the case with China.

pg2• 18 years ago

No; large empires generally collapse from within.

But Constantinople was by no means an empire when the Ottomans took it. By that point it had shrunk to a mere town.

cabalamat3• 18 years ago

I don't think so. One large factor in the decline of empires is when they get too big for the communications technology of the time to handle, i.e. if it takes too long for a message or an army to travel from one end o the empire to another.

The British, Spanish, French, Mongol, Ottoman and Roman empires all suffered from this, to some extent.

dejb9• 18 years ago

To me it seems the decentralisation of power in the world world is a good and natural course of events. I think that communication technology such as the internet makes this the most likely course of events. The US doesn't have to be 'the superpower' to flourish economically. In fact trying the be 'the superpower' militarily could in part be responsible for the current financial situation.

jfornear• 18 years ago

http://en.wikipedia.org/wiki/Hegemonic_stability_theory

mynameishere• 18 years ago

China has over a billion people, mostly ethnically unified, intelligent, hard-working, criminally non-inclined. America has 300 million people who are, in aggregate, a continental multi-national empire, as was the Austria-Hungarian Empire or the USSR.

Give it ten years, and we're #2.

nikils• 18 years ago

there was an article posted yesterday that said diversity is more important than ability. So ethnically unified might be disadvantage compared to diverse population of US.

lst• 18 years ago

Sure, but most people here are still too deeply inside the American Dream, and if you wake them up, they get a little nervous...

The US is really getting old already, and for sure they will be the last ones to recognize it... (as it always happens with declining things).

rkowalick• 18 years ago

The only difference between the US and these empires of yesteryear is that we didn't invade new lands to obtain a diverse population. The diverse populations invaded us.

mattmaroon3• 18 years ago

I don't think the end of America's dominance is coming so much as a result of mistakes on our part as it is the rest of the world industrializing. We don't have some sort of monopoly on entrepreneurial spirit, hard work, or basic freedoms, and as those things pervade other large countries like China, they'll rise faster than us.

In fact, China has some serious advantages in the early stages. Democracy may be the only long-term viable form of government, but their current communist mishmash is much more effective at getting things done, and quickly. It won't last for ever, but it might get them to escape velocity relatively quickly.

jerf• 18 years ago

Developing countries SHOULD develop more quickly than the first wave of industrialization. Instead of blundering through a variety of worse-than-modern technologies they should jump directly to current tech; instead of discovering how to build a power infrastructure they should learn from the leaders, etc. The closer they get to "caught up" the more they can contribute to advancing the wave of human progress, and the more they will also slow down.

If China's GDP increase was on par with the US's, something would be very wrong with China. (Developing countries that aren't increasing their GDP or even see it decrease typically do have something very wrong with them.)

(A lot of people seem to make this basic mistake. A developing economy has a lot of low-hanging fruit, long-gone in an industrialized country. If we could suddenly open a portal to 2050, we'd have low-hanging fruit in our economy too... but we'll have to get to 2050 the long, slow way.)

netcan5• 18 years ago

If Fannie Mae and Freddie Mac were financial time bombs of one kind, then surely China's state-owned enterprises are time bombs of another. Can anyone determine with even approximate confidence the extent of their liabilities?

I've been thinking that since this started. China doesn't like bad news, they can hide them. Chinese economic problems could be more far reaching the the US (at least here in Oz).

netcan5• 18 years ago

A lot of the predictions of the US demise as a superpower are not about US losing more during this crisis then others. They they're about triggering an inevitable shift.

Depending on your assumptions , the US, China, India & Europe get close to par with each-other (in terms of GDP) . sometime before current Grad Students retire. Could be 5 yrs, could be 40. Equally importantly, a lot of mid sized economies close the gap between them & the whales.

The assumption that economy size translates into military & political power makes sense. By that measure, the US already feels bigger then it should. The EU is a terrible mechanism for validating that assumption. China for all it's faults is not very assertive on the world stage. Neither is India. (Russia is similar to the US in this sense. Their assertiveness means they feel bigger then their GDP should allow)

The current non-US big fish (India, China & Europe) are just not converting GDP to militar/politcal power very well. But the raw ingredient is already there. China & India as manufacturers may even be able convert money to power at a better rate then the US

Public opinion in the US & elsewhere is currently that the US backed financial theories are to blame for the situation. The US's military/political methods are even more unpopular. Fair or not, Georgia/Russia isn't getting much worse press the Iraq/US - even in the countries officially aligned with Georgia/US. & Russia's Putin doesn't have a good name.

This sound familiar: you can have us or the russians/chinese. The euros are wimps. You'll take us because the alternatives are worse! You hear it & elsewhere. 30 years ago those held sway. These days less.

anamax7• 18 years ago

> This sound familiar: you can have us or the russians/chinese. The euros are wimps. You'll take us because the alternatives are worse! You hear it & elsewhere. 30 years ago those held sway. These days less.

Hey - feel free. Don't let us stop you. Don't forget to write. Wear a sweater.

Since you're planning to reap the benefits from that shift, I trust that you're willing to accept the costs. After all, it's going to work out great, so that's no big deal.

netcan5• 18 years ago

bite?

dejb9• 18 years ago

> The current non-US big fish (India, China & Europe) are just not converting GDP to militar/politcal power very well.

You could look at this a different way and say that perhaps the US is relatively militaristic. Wouldn't it be better for the world if we could minimise militarism and military spending in general? To me it looks like that is the direction these non-US big fish are trying to move in.

netcan5• 18 years ago

Better for the world? Probably.

I wasn't making a request though.

rms• 18 years ago

In the long run, does anyone doubt that China will eventually surpass the US as a financial power? By that time, I sure hope we aren't trying to project military power worldwide. The last thing I want is for The Project for the New American Century to get the last laugh. http://en.wikipedia.org/wiki/Project_for_the_New_American_Ce...

known• 18 years ago

A country is not made of land; a country is made of its people. -- G.A.Rao

cabalamat3• 18 years ago

In the short term, the financial crisis won't affect America's position at the top (after all, it currently spends as much on its armed forces as the rest of the world combined).

In the long term? According to the IMF in 2007 The USA's GDP was 13.84 T$ whereas China's was 3.25 T$. If China's economy grows at 6% faster than the USA's (i.e. 9% versus 3%) they will surpass the USA in GDP in 2031.

ars2• 18 years ago

Extrapolating to the future based on one datapoint will never work.

cabalamat3• 18 years ago

China's growth has been about 9% per annum fairly steadily for the last quarter-century. America's growth has been about 3% over the same period. So it's not as if I'm using just one year's figures.

ordinaryman• 18 years ago

The article makes a comparative analysis based on weak points from each economy with respect to that of US, ignoring those countries in other aspects.

For example, India, one of the BRIC countries, does not get a mention though Brazil, Russia and China are mentioned.

Did some googling for Indian numbers..

> But here it helps that the ratio of government debt to GDP in the U.S. runs to about 62%. For the eurozone, it's 75%; for Japan, 180%.

India's debt is at 41.7% of GDP in FY08 http://www.financialexpress.com/news/Indias-debt-at-41.7-of-...

(China, Brazil, Russia ignored)

> Last month's $700 billion bailout package seems staggeringly large, but it amounts to a little more than 5% of U.S. gross domestic product. Compare that to Germany's $400 billion to $536 billion rescue package (between 12% and 16% of its GDP), or Britain's $835 billion plan (30%).

India : No bailout.

(Japan, China, Brazil, Russia ignored)

> Before yesterday's surge, the Dow had dropped 25% in three months. But that only means it had outperformed nearly every single major foreign stock exchange, including Germany's XETRADAX (down 28%) China's Shanghai exchange (down 30%), Japan's NIKK225 (down 37%), Brazil's BOVESPA (down 41%) and Russia RTSI (down 61%). These contrasts are a useful demonstration that America's financial woes are nobody else's gain.

Indian BSE : 23.92% for the last 3 months.

(India ignored)

No. I am not suggesting that India is going to become a Superpower.

I just feel that that the article takes a weak path for comparison. It is like - "US is better than CountryA in this aspectA and CountryB in this aspectB and CountryC in aspectC and since no other country is better than US, US will remain a super power."

Why America Will Remain the Superpower

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