Back to the Future

The great strategic narrative of our time is about American decline. However, although we are facing some brisk economic headwinds that our political leaders seem clueless in dealing with, I remain unconvinced that we have entered a period of terminal decline. As Adam Smith noted two centuries ago, “There is a great deal of ruin in a nation.” At some point Americans, in their infinite wisdom, will elect officials committed to setting the ship of state on a sustainable fiscal course. One only hopes they will get around to it before financial collapse is staring the country squarely in the face.

In any case, our current $15 trillion economy means we are still, by a wide margin, the biggest kid on the block — a condition that is likely to continue for some time. Even if China maintains its remarkable growth for another couple of decades — a big if — it will only surpass us in the overall size of its economy. The United States will remain well ahead when economic power is measured on the basis of GDP per capita. This means that even if China becomes the world’s largest economy, huge numbers of its population will remain mired in deep poverty. In strategic terms, such poverty will limit China’s ability to mobilize enough of its economic power to build the type of military force required to challenge the United States on a global scale. Unless, of course, we decide to opt out of our current role and hand global leadership to the Chinese by default.

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