Decline and fall of the US

[Bast]

In the history of empires the end is abrupt, and those that rely on them need to be ready.

All empires, no matter how magnificent, are condemned to decline and fall. We tend to assume that in our own time, too, history will move cyclically - and slowly.

The environmental or demographic threats we all talk about seem remote. In an election year, who really cares about the average atmospheric temperature or the age structure of the population in 2050?

Yet it is possible that this whole cyclical framework is, in fact, flawed. What if history is arrhythmic - at times almost stationary, but also capable of accelerating suddenly, like a sports car? What if collapse comes suddenly, like a thief in the night?

Great powers and empires operate somewhere between order and disorder. They can appear to operate quite stably for some time; they seem to be in equilibrium but are, in fact, constantly adapting. But a small trigger can set off a ''phase transition'' from a benign equilibrium to a crisis - a butterfly flaps its wings in the Amazon and brings about a hurricane in south-eastern England.

Regardless of whether it is a dictatorship or a democracy, any large-scale political unit is a complex system. Most great empires have a nominal central authority - either a hereditary emperor or an elected president - but in practice the power of any individual ruler is a function of the network of economic, social and political relations over which he or she presides.

As such, empires exhibit many of the characteristics of other complex adaptive systems - including the tendency to move from stability to instability quite suddenly. But this fact is rarely recognised because of our addiction to cyclical theories of history.

The Bourbon monarchy in France passed from triumph to terror with astonishing rapidity. French intervention on the side of the colonial rebels against British rule in North America in the 1770s seemed like a chance for revenge after Great Britain's victory in the Seven Years War a decade earlier, but it served to tip France into a critical state.

In May 1789, the summoning of the Estates-General, France's long-dormant representative assembly, unleashed a political chain reaction that led to a swift collapse of royal legitimacy in France. Only four years later, in January 1793, Louis XVI was decapitated by guillotine.

The sun set on the British Empire almost as suddenly. So, what are the implications for the United States today?

The most obvious point is that imperial falls are associated with fiscal crises - sharp imbalances between revenues and expenditures, and the mounting cost of servicing a mountain of public debt.

Think of Ottoman Turkey in the 19th century: debt service rose from 17 per cent of revenue in 1868 to 32 per cent in 1871 to 50 per cent in 1877, two years after the great default that ushered in the disintegration of the Ottoman Empire in the Balkans. Consider Britain in the 20th century. By the mid 1920s, debt charges were absorbing 44.5 per cent of total government expenditure, exceeding defence expenditure every year until 1937, when rearmament finally got under way in earnest.

But Britain's real problems came after 1945, when a substantial proportion of its immense debt burden - equivalent to about a third of gross domestic product - was in foreign hands.

Alarm bells should therefore be ringing loudly in Washington, as the US contemplates a deficit for 2010 of more than $US1.47 trillion - about 10 per cent of gross domestic product, for the second year running.

Since 2001, in the space of just 10 years, the US federal debt in public hands has doubled as a share of GDP from 32 per cent to a projected 66 per cent next year. It is projected that debt could reach 344 per cent by 2050.

These sums may sound fantastic. But more terrifying is to consider what continuing deficit finance could mean for the burden of interest payments as a share of federal revenues - up to 85 per cent in 2050.

The fiscal position of the US is worse than that of Greece. But Greece is not a global power. In historical perspective, unless something radical is done soon, the US is heading into into Bourbon France territory. It is heading into Ottoman Turkey territory. It is heading into postwar Britain territory.

For now, the world still expects the US to muddle through, eventually confronting its problems when, as Winston Churchill famously said, all the alternatives have been exhausted. With the sovereign debt crisis in Europe combining with growing fears of a deflationary double-dip recession, bond yields are at historic lows. There is therefore a strong incentive for those in the US Congress to put off fiscal reform.

Remember, half the US federal debt in public hands is in the hands of foreign creditors. Of that, a fifth (22 per cent) is held by the monetary authorities of the People's Republic of China, down from 27 per cent in July last year. China now has the second-largest economy in the world and is almost certain to be America's principal strategic rival this century, particularly in the Asia-Pacific region.

Quietly, discreetly, the Chinese are reducing their exposure to US Treasury bonds. Perhaps they have noticed what the rest of the world's investors pretend not to see - that the US is on an unsustainable fiscal course, with no apparent political means of self-correcting.

That has profound implications not only for the US, but also for all countries that have come to rely on it, directly or indirectly, for their security.

http://www.smh.com.au/opinion/society-and-culture/decline-and-fall-of-the-us-20100728-10w1x.html

If the US were to decline and fall, it would also mean the decline and fall of unbridled capitalism. What do you think?

 

[AL_DA_GREAT]

I think the Usrael (USA and Israel) are on their way down. Their military is stretched, Russia China and Iran are getting more powerfull by the day. The capitalist economy is falling and their debt is rising.

There are many other factors. The USA was built by WASPs, they are now being pushed aside. The USA will have more and more internal conflict as the people who built the country looses it.

The next big step in bringing the Americans down would be if South America could throw out the American corporations that own the continent. With a strong China, war in the middle east and a free south america the USA has very little that it controls.

There are few things that I am as passionate about as bringing down the USA and Israel.

 

[useless]

More specifically Israel, it seems.

 

[ParadigmShifter]

I am a very active white nationalist. I attend street rallies several times a month, I help create a newspaper and I do a lot of work within my group. I spend 15 hours a week on white nationalist activism that isn't internet activism.

Are you more passionate about white nationalism or bringing down the US and Israel?

 

[useless]

I thought America was the bastion of White nationalism? A bit counter productive, eh? Why do you hate the white race, AL?

 

[Mise]

Niall Ferguson is an endlessly frustrating economic historian. Why don't we ever point out that Chinese shares have fallen ~50% from their peak, compared to ~25% for US shares? Is that because it doesn't quite fit with the narrative of the US being a declining power, and China being a rising power? US bond yields are historically low, and falling - why? Because, in times of trouble in the EU and elsewhere, investors still see the US bonds as a safe haven. Again, does that fit with the narrative of the US declining and China rising? No, so we don't hear it in the article. 20 years ago people were talking about Japan as the US's biggest threat, but now it's one of the US's biggest trading partners. And what about India? Nobody ever mentions them. It's always China this, China that - where's the strategic threat from India? Why is China the tiger, and India the kitten?

The article is as worthless as any other stupid prediction for 2050. You can turn the argument whatever way you want, by pointing out whatever mindless fact you want, but somebody else could take those same facts and see it completely differently. It's a pointless exercise.

 

[useless]

America doesn't exactly mean Capitalism in the sense that if it was to fall Capitalism would be doomed.

 

[Mise]

Yeah I mean if anything it shows that economic liberalisation results in huge economic growth. India used to be communist, then liberalised in the 1990s, and now look at it - one of the fastest growing countries on Earth. Same story in China, except that China still maintains large state owned banks and corporations, and regulates most aspects of economic life. The lifeblood of capitalism -- the ability to start a business, the entrepreneurial drive, the animial spirits of the market -- is thriving in China. No two ways about it, capitalism is far from dead; indeed, you could say that the story's just beginning.

 

[cardgame]

redundancy and redundancy of the Title

 

[amadeus]

I didn't realize that with government spending reaching 45% of GDP the U.S. still represented unbridled capitalism. Almost half is a lot of bridling.

Good points on Mise's part; America still remains the most economically prosperous country in the world in both absolute terms and in per capita incomes (save for a few tax-lax microstates and petro-states.) Our government today is certainly doing bad things that jeopardize our future, but to put it so catastrophically is just ridiculous.

 

[Masada]

Niall Ferguson is an endlessly frustrating economic historian.

Niall Ferguson is a polemicist of dubious academic worth and amongst other sundry distinctions is an apologist for Imperialism.

It's always China this, China that - where's the strategic threat from India? Why is China the tiger, and India the kitten?

*Shrug* China is an fairly unsubtle global player - it makes noise. Indian by contrast is subtle and likes the softly-softly approach except when it tries to cozy up to regimes of dubious character. It sucks at that. It can't out-Chinese the Chinese.

 

[Disgustipated]

America doesn't exactly mean Capitalism in the sense that if it was to fall Capitalism would be doomed.

especially since it was socialist programs that bankrupted us (or will bankrupt us). The problem isn't capitalism, but socialist entitlement programs and warmongering republicans.

 

[AL_DA_GREAT]

Are you more passionate about white nationalism or bringing down the US and Israel?

The USA and Israel is Europe's main enemy, immigration is a weapond used by the elite (mainly jewish) to break down Europe. The point of multiculturalism is to break down countries. A country with a strong sense of unity and culture can not be ruled by the financial elite. A mess of atomised consumers with no culture and heritage is much easier to rule. The soviets used the same tactics. They where also pro multi culti and anti family. To fight against immigration is useless, it is a symptom. To get anywhere we need to bring down the zionist elite that rules wall street and washington.

 

[nonconformist]

Oh wow, a historian that claims that Germany prior to 1914 was a peace-loving pacifist nation, that England was TERRIFIED of WWI France, the British executed German prisoners en masse, and that Germany could easily have paid back reparations post 1918?

 

[useless]

especially since it was socialist programs that bankrupted us (or will bankrupt us). The problem isn't capitalism, but socialist entitlement programs and warmongering republicans.

Socialism! Socialism! Get a grip, Socialism isn't evil.

 

[ParadigmShifter]

I'm pretty sure it was the sub-prime mortgages fiasco that plunged most of the world into recession, not socialism.

 

[Disgustipated]

The USA and Israel is Europe's main enemy, immigration is a weapond used by the elite (mainly jewish) to break down Europe. The point of multiculturalism is to break down countries. A country with a strong sense of unity and culture can not be ruled by the financial elite. A mess of atomised consumers with no culture and heritage is much easier to rule. The soviets used the same tactics. They where also pro multi culti and anti family. To fight against immigration is useless, it is a symptom. To get anywhere we need to bring down the zionist elite that rules wall street and washington.

umm, I'm not sure what to say. Are you saying we need another holocaust?

 

[Disgustipated]

I'm pretty sure it was the sub-prime mortgages fiasco that plunged most of the world into recession, not socialism.

yes that is what caused the recession. Recessions are normal we can get past that no problem. That's not the topic of the thread.

If the thread title is to be believed, it will be america's debt that causes its downfall by 2050. That is caused by entitlement programs and military spending.

 

[ParadigmShifter]

Another? Don't you know AL's views about the holocaust?

 

[useless]

It wasn't the bankers, it was Obama!