The Relative Economic Position of the USA is Likely to Decline
The economic clout of the USA has been huge since the end of World War II. The relative position has been decreasing recently with the rise of not only Europe and Japan but Korea, China, India, Brazil and many more. This means the risks to the USA of failing to deal with perennial problems (the most costly but not most effective health care system, spending beyond our means, weak diplomacy, excessive legal costs, poor management practices…).
Fareed Zakaria’s Post American World is a good explanation of some of the current global economic forces in play. He comes to the same conclusion I do that the USA is still in the strongest position today. But the world is changing and the relative position of the United States is declining. The new world requires working with others and the USA needs to adjust to this reality. Too many think the USA can continue to act as though the rest of the world must comply with the wishes of the USA.
The litigation system is now routinely referred to as a huge cost of doing business, but no one dares propose any reform of it. Our mortgage deduction for housing costs a staggering $80 billion a year, and we are told it is crucial to support home ownership. Except that Margaret Thatcher eliminated it in Britain, and yet that country has the same rate of home ownership as the United States. We rarely look around and notice other options and alternatives, convinced that “we’re number one.”
America has become a nation consumed by anxiety, worried about terrorist and rouge nations, Muslims and Mexicans, foreign companies and free trade, immigrants and international organizations. The strongest nation in the history of the world now sees itself as besieged by forces beyond its control.
The book focuses quite a bit on the USA, China and India and provides good overviews of the economic strength and weaknesses of those countries. The USA is in a leadership position but the future requires an understanding that others deserve to be treated as partners not allies to be dictated to. If not they will just partially disengage with the USA and create stronger relationships with others. That would not be in the interests of the USA.
Related: Best Research University Rankings (2008) - Dr. Deming’s 7 Deadly Diseases of Western Management - Science leadership and economic growth - Easiest Countries for Doing Business (2008) - Top 12 Manufacturing Countries in 2007 - Why America Needs an Economic Strategy - Country H-index Rank for Science Publications - USA Spent $2.2 Trillion, 16.2% of GDP, on Health Care in 2007