According to the recent "holiday" issue of the Economist, in an article about how China's GNP has been recently revalued based on an analysis of domestic purchasing power (Clipping the dragon's wings), it was noted off-hand that China will surpass the USA as the "world's largest economy" in approximately 10 years.
10 years!!!
I do not think of myself as a jingoistic American whose self-worth requires being a citizen of the #1 economic power and indeed I have long accepted that our 5% share of the human population cannot indefinitely account for such a disproportionate share of the planet's collective wealth. Still, I find it shocking that the ultimate indicator of America's relative economic decline is projected to cross the magic barrier, from #1 to #2, quite so soon.
10 years!!!
And with a further decline in the dollar, it is actually possible that Barack Obama (or your favorite candidate) will preside over the official end of the New American Century.
America, are you ready for the coming demotion???
While I, along with most readers of this diary, have no doubt been aware of America's relative economic decline, especially vis-a-vis China, it was the following graph that ultimately engendered in yours truly the cold realization that the designation, "World's Largest Economy" was so soon to be wrested away from the good old USA.
First, perhaps all of America should thank the World Bank for cutting China's GNP by nearly half in one bold recalculation, as the day the New American Century officially ends has been postponed until perhaps Barack Obama's 2nd term (or your favorite candidate).
One the other hand, in the great time-line of emerging world powers, a few years either way hardly seems to matter, even given the accelerated pace of modern history.
10 years!!!
What does this mean? Is there any issue potentially more explosive? Are American's ready to be #2? And shortly thereafter #3 (behind India)?
Why has this looming "crisis" not dominated the presidential debates? Are candidates too afraid of the what the reaction will be to the messenger of this particularly unwelcome message?
Of course, one may legitimately argue that the end of the New American Century was after all, inevitable. Indeed, economic growth and associated decline in poverty in the world's most populous nations not only implies a more just distribution of wealth, along with collateral improvements in the prospects for human social, political and ecological progress, but also reflects a sort of triumph of "American Capitalism", as it's not such a stretch to assert that emerging nations are in some sense emulating the United States' own economic development path. While valid, such fatalistic arguments hide the fact that Republican economic policies have advanced the Day of Reckoning by perhaps a decade or two.
Bush's tax cuts, by plunging America's fiscal balance from large surpluses into even larger deficits, compounded by a rather expensive, bloody and utterly unnecessary war in Iraq, has kept interest rates artificially high over the last 5-6 years, thus sucking vast amounts of foreign dollars back into the USA in the form of Treasury Bills and whatnot, thereby greatly exacerbating the trade deficit currently fueling America's relative economic decline. In a nutshell, the need to finance massive tax cuts for the super wealthy, along with the war in Iraq, has been more-or-less directly responsible for advancing the End of the New American Century forward by (I estimate) at least a decade.
Does it matter? Yes. Economic power ultimately translates into military and political power. Note that America had virtually no standing army at the beginning of WWII and even our naval forces in the pacific were quantitatively and qualitatively inferior to those of Imperial Japan. Nonetheless, our relative economic power (I believe the American economy was nearly 9 times larger than Japan's at the start of the war) meant that it was only a matter of time before Japanese forces were completely overwhelmed, as in fact they were. Today, China makes consumer products for Walmart. Tomorrow, those same hyper-efficient, extraordinarily flexible factories might churn out something other than blue light specials. As America's relative economic power declines, so will our ability to influence our destiny.
In summary, not only have the Republican's destroyed America's moral leadership, in the torture chambers of Guantanamo and other black sites we will only find out about after Barack Obama (or your favorite candidate) takes office, but the Republicans have accelerated the destruction of America's economic leadership in nearly equal measure. I'm not sure the former even matters to today's Republican party but I'm quite sure that the latter matters quite a bit to the defense Republicans comprising the third leg of the GOP triad.
Ready or not, the End of the New American Century is upon us. No set of policies could have postponed this event indefinitely, but Republican policies have advanced this event to the point where it just might occur during the Barack Obama (or your favorite candidate's) presidency.
Then again, maybe that was the grand old strategy all along.