The Future of the United States of America on the World Stage

[lonesoldier84]

To keep my point short and to the point I will do this in point form:

1) The US saw great gains in economic prowess due to WW2 and it was these events which catapaulted the US to its status as superpower with no peers.

2) The US consumer relies relatively heavily on imported goods for food, utility, and entertainment.

3) The largest sectors of the US economy have typically been in fields where there is little physical product relative to their finance sheets. (except for oil, which will be a diminishing category). The largest sectors (generating the most income) are the financial sector (banks, insurance etc), military equipment and research, and pharmaceuticals. Also, the service sector is quite large. These are not things which have traditionally formed a stable backbone of a healthy economy.

4) At times when the US economy was under duress, foreign developments (eg. US involvement in WW2 and the rebuilding of Europe thereafter) and internal manipulation has been of the greatest aid.

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Next phase of argument:

1) The emerging economies of the world have immense manpower resources currently in development. India and China, with extremely small portions of their manpower being utilized are already firmly planted on the international landscape.

2) The emerging economies of the world are in large part self-sufficient in many respects.

3) As they continue to grow, they show extremely strong economies which are as strong as they are due to domestic conditions, potential, and planning.

4) These rapidly growing economies are generating truly massive surplusses.

5) With these massive surplusses these countries choose to invest, rather than spend. This further increases their growth and realization of their potential and manpower. This is especially true of China.

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Next phase:

1) China is continuing to take over large portions of the US debt.

2) Bush, in dealing with the rapidly escalating debt, chose to increase further how much the US gov't would take (rather than devise a methodology of how to pay back).

3) Bush chose on several occassions to take vast sums of money out of social programs (education, health, etc) to pay the MINIMUM payment (just interest) on the debts to foreign investors.

4) As is the case with keeping something elevated in a centrifuge, once the thing stops spinning (manipulating domestic and foreign elements)...the whole thing will come crashing down. This is compounded with grave domestic concerns (health, education, etc).

5) China has been buying out majority status in many large American companies. Many of these companies form the backbone of the american economy. Many of these companies are very old, and played a pivotal role in the development of the US as a nation.

6) China has eliminated a clause in its contracts which states when buying majority shares in companies that it will not direct the companies at some point.

7) China posts an annual surplus that is ridiculous. I forget the exact number, but it is extraordinary.

8) China has a large number of students maintaining honors in high school. This number is equal to the TOTAL number of students in the american school systems. That is without even counting those that are passing and doing well but are not on the honor roll. That is a massive manpower advantage of well-educated people.

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My point:

The US has grown and taken centre stage on the international for a while. With China continuing on its current path, it will grow to a superpower status of such epic proportions that its future status will truly eclipse any superpower status before it. It will be a mammoth Ultra-Power. Several years of military spending will not only match, but overtake American standards and quantities. The same goes for every other measure of a super-power.

The US, unless it takes some drastic action in the near future to continue to fuel economic growth, might see the "bottom fall out" on its reign as top contender. The first thing which needs to happen is an attitude adjustment. The US is just another country. Truly fundamental shifts in attitude need to take place in the hearts and minds of the american people. Without this shift, the political leaders will be able to continue to take advantage of the populace for their own ends and to the detriment of the American status relative to the rest of the world.

It is enough to survive and to live in peace. It is not mandatory that the top spot always be American.


Live long and prosper.

 

[OZXJR]

The Australian answer to all of that would be "she'll be right mate "

Do what we do and just sit back and watch the world go by,go for a ride and have a beer with ya mates ,stuff the politics of who's got the biggest gun.

 

[hardway]

The planning of the economy of China that you speak of is it's achilles heel. Not saying that China's economy will fall apart, but there is a high probability of huge misallocation of resources with their system. They are also largly dependant on exports to North America and Europe. Right now, they go as their trade partners go.
This may not be the case for long though, as more and more Chinese enter the consumer class in their own country, they will become less dependant on export. But, as living conditions and wealth increase, so will costs, making China a less attractive site for manufacture (most manufacturing is done by chinese for foreigners), and manufacturing will shift to the next cheap **** hole.
I think India has more long term potential than China. Their econmy is more dynamic with much less central planning, and they are already a flourishing democracy. China still has a huge battle to fight between the people and the communist party for the freedom of the country. This will occur whether/because of economic success or failure.

We've (USA) got nukes and a pretty big conventional stick, so no one's coming to our shores to pick a fight. I, for one, will be very happy to pass out of this rediculous imperial phase of our cultural development.

 

[GConn]

^ that doesn't mean that China's economy will take a plunge....economies shift to adjust to new environment too, as the individual business units will. Their economy may shift to better product manufacturing, other services, R&D or whatever they are best at if need be. But after re-assessing how many of them exist on this planet, it is likely that they'll have cheap labour available for a long long time to come. Just my 2c

 

[hardway]

^ that doesn't mean that China's economy will take a plunge....economies shift to adjust to new environment too, as the individual business units will. Their economy may shift to better product manufacturing, other services, R&D or whatever they are best at if need be. But after re-assessing how many of them exist on this planet, it is likely that they'll have cheap labour available for a long long time to come. Just my 2c

I'm not saying they absolutely will fall apart anytime soon, but centrally planned economies generally don't work out well. They also have an internal ticking time bomb in the dictatorial power of the communist party.
If they continue to keep a large portion of their people dirt poor, i.e. in the "cheap labor" category, while another large portion of their society moves on to middle class consumerism and the quality of life that it denotes, they will have a drastically stratified society that can only be maintained by force. It would be a lot like slavery in the American south or feudalism in medieval Europe.
These processes may take a while to develop though, and China no doubt is on a good run.

 

[necrotimus]

We are at a period in world economic history that hasn't been seen before. If you look at all the great civilizations of the past their peaks were during and right after "industrial revolutions" and "expansionism". The United States (and many other countries) are coming off of a huge economic surge of first expansion then industrial revolution more than 200 years in the making.

We will deal with the easiest problem first: There isn't much room left to expand to anymore. Some will argue there are plenty of countries left to invade. Invasions are bad for overall business unless you plan to conquer and stay for good which isn't very popular anymore.

As far as the industrial revolution goes the US is pretty much at the current peak of technological limits. Other countries now on the rise (such as China) are not and can still make siginificant gains by producing items to sell internally. The US doesn't really produce many goods to be sold internally anymore because the profit margins are smaller. Unfortunatley many of the "goods" the US produces now are intellectual property which although valuable are not protected well on the world stage.

The economy will eventually stabilize but the questions will be how long will it take and where will it end up. This will depend a lot on how many people meddle with it. There is a balance to be maintained between the economy and the good of the people. The US auto makers going out of business are an economic correction (same with the banks and mortgage companies) but letting these corrections occur freely are not good for the people. It could be argued that it is good for the people in the long run (which I agree with) but there are safer ways to defuse a bomb than blowing it up. An economic free fall will ultimately spur greater growth but that would be very bad for the US as a nation.

Finally, since this is getting to be such a long post, economics and what is best for a nation do not always correspond. Being dependent on other countries for things when they are cheaper makes economic sense but isn't always in the nations best interest. The idea of individual nations is behind the economic idea of a world economy.

So in our lifetimes I would bet more on a slow economic stabilization for the US and a lot of the world instead of any more huge windfalls. Unless of course aliens land and the world enters into a large trade agreement.

 

[jmerch44]

Just because China becomes a bigger superpower doesnt mean that the United States is doomed. I would hope that China would assume the role of the world police and free up time and money for the United States to fix it own internal problems. Americans have grown tired of taking on the burden of other countries trials and tribulations, especially when we have our own.

It's not like chinas going to take over the world and invade the U.S., they're just going to have a stronger economy and a stronger military. Keep in mind that strategicly, the united states would be one of the hardest countries to take over, as they would have to take the entire continent. China poses a minimal threat, and almost none if the United States eliminates it's need for foreign oil. dont forget that China exports alot of goods to the U.S., it would be unwise to completely cut the U.S. out of the picture.

We've been avoiding conflict with China for decades, and we will continue to, the United States will always remain a deadly force. It just seems that the power and responcibility will be transfered and thats not nessasarily a bad thing.

 

[GConn]

So the US have been appointed as world police? Hmm, how hoble of them

 

[jmerch44]

You disagree? whether appointed or not, thats the case.

 

[GConn]

If it's not appointed, it doesn't serve other people interests. It serves it's own. A "police" force has a different task than serving its own interests. So I feel that the word 'police' won't quite fit the description.

As for your previous comment, I wasn't suggesting that the US is doomed because of China or any other reason. It's not doomed

 

[D-Mac]

China and India are emerging powers, no doubt about it.

Here are a few things to think about though.....

China does import a LOT of oil and GRAIN. Simply put, they need food. Badly. U.S. protectionist policies make it hard for foreign markets to develop and if the Farm Bill continues to subsidize conversion from wheat to corn (for ethanol) this won't relieve the pressure anytime soon. Anyone remember what Japan did when their empire was constrained by resource availability?

I see the U.S. assuming a role similar to modern Britian today. Not 'the' world power, but still a major player - if for historical reasons as much as anything else.

What happened to Brazil? Aren't they supposed to be a major emerging player on the world stage?

What about the Russians? Are we heading for Cold War II?

 

[jmerch44]

But we were appointed, there is a reason the U.S. is always called on when there is a tragedy or conflict in the world. Police is the right word, it's just not the only word. Our interests are also the cause of most of our involvement in other countries business. My comment about the U.S. being doomed wasnt directed at anyone, I was just posting my comment. Not trying to start anything.

 

[Cuba]

Man have you guys not been watching the news? China's economy, which is based on mating cheap labor with cheap materials and shipping vast quantities of said "cheap crap" to the US and Europe, is in major trouble. Their economic success is based on OUR consumption, so to say that China is about to... what, sneak past us while we're in a recession? is pretty naive. We are their largest customer and we aren't buying nearly as much as we had been. Their economic growth was due to our glutony which is on hold for the time being.

Their profits were reinvested back into the US so that we could continue buying at the rates we were. Think about it! You sell a ton of stuff to someone, they run out of money, so you loan them your profits from these sales so they can keep buying more... does this sound sustainable to you? Or SANE??? Sounds a lot like Enron doesn't it? They are in big trouble, but it will be facinating to watch the development of that country over the next 50 years. Their competitive advantage is a massive pool of cheap labor. What happens as this labor pool wants to make more money? Lucky for the Chinese government officials, human rights are not high on the list over there, and they are an oppressive communist society that dictates how much these workers are paid. But you can't keep them down forever, and eventually these workers are going to get higher wages, which means they will no longer be cheap labor, which means some other country gets to be the manufacturing leader that we all look at with such undeserved awe.

In the current world whoever has really cheap labor and semi modern infrastructure (China, Malaysia, Taiwan) will have the cometitive advantage (low cost) to be successful in the short term. As these countries develop further they price themselves out of the market. You said it yourself, no they're getting decent educations, advancing themselves, and as they do this do you think they'll be working in a t shirt factory earning pennies an hour? As the chinese population advances and standards of living begin to improve it will be someone else's turn. The next generation of countires who's government can surpress the workers' wages and produce high volumes of cheap crap at a lower cost than anyone else will be the high growh surplus economy. Perhaps a few countries in Africa will become the next manufacturing juggernaut? I don't know.

The US has evolved to the opposite end of the spectrum where manufacturing workers are unionized and paid far to much to be competitive in any market. The 780,000 UAW "workers" that are getting 90% salaries while laid off for instance (along with full benefits, etc.) is unsustainable and the reason for the mass exodus of American manufacturing jobs. Why would you pay ten times as much for the same thing? Answer: you wouldn't. China will eventually find itself in this awkward situation of having to adjust what the public feels it is worth back down to what reality feels they are worth. We are just WAY ahead of them on the evolutionary scale. Obama has a major task in front of him, I'm almost glad McCain lost the election. (Since Obama has thrown out his campaign promisses and taken over McCain's policies any way... but that's another story)

The answer- the US will always have some manufacturing going on, but it will not be a major component to our economy in the future. It simply isn't sustainable or economically viable at our standard of living. Unless it's all done by robots in which case you still lose the jobs. What we need going forward is a solution to the questions: if these former manufacturing workers are no longer viable in that field, what should they be doing? And who's responsibility is it to retrain/re edjucate this workforce? Obama thinks we should just spend taxpayer dollars to subsidize these massive losses, McCain felt that jobs lost in the manufacturing industry should be created in other fields since obviously the time has come for... change. What do you think?

 

[Cuba]

China poses a minimal threat, and almost none if the United States eliminates it's need for foreign oil. dont forget that China exports alot of goods to the U.S., it would be unwise to completely cut the U.S. out of the picture.

Actually China has the largest military on the planet and enough nuclear weapons to eliminate human existence, so I wouldn't agree that this is "minimal" on the threat scale. Quit watching Red Dawn! I know it's good but has no place in real discussions!!

 

[GConn]

News ? There is a crisis situation going on?? :spank:

I think that most of your points were covered before. The point is whether someone talks for the short term of the long term. In the long term each economy adjusts to the environment. Each economy has its ups and downs. In the long term the chinese economy will adjust to whatever they can do best and they'll compete in that. The cheap labour will be available in China for a long time to come, and that's not dictated only by the communist government. The population is very dense and that can only mean one thing. Things will eventually change but it's not going to happen in the foreseeable future IMO.

As for the Chinese army I thing it would oppose a threat to anyone. Biggest threat of a man in war (In case of) is underestimating his enemy

 

[Cuba]

^ that doesn't mean that China's economy will take a plunge....economies shift to adjust to new environment too, as the individual business units will. Their economy may shift to better product manufacturing, other services, R&D or whatever they are best at if need be. But after re-assessing how many of them exist on this planet, it is likely that they'll have cheap labour available for a long long time to come. Just my 2c

My point was that they have already taken a plunge. They have been using profits to subsidize sales to customers consuming beyond their means and it has recently exploded in their faces. They are in big trouble. Also keep an eye on human history, once quality education is available to the masses they become powerful. They will be wanting better compensation in the future. When I say short term I'm talking 50 years, not 5, but then again we are still accelerating at unbelievable of rates.

 

[cv_rider]

China's success will be to the American's (and everyone else's) advantage. Increasing Chinese affluence means consumers can buy more, and they'll start wanting the things that are made (or designed -- where the money is) in the high-education industries in the US. The world economy is so linked that if one boat floats, the others do too.

My company sells a lot of semiconductors to native Chinese companies. My company wouldn't be so big if China didn't have a fairly high level of capability to design/assemble complex products and consume my company's products. I might not have a job if China high-tech industry wasn't as successful as it is.

 

[Cuba]

if one boat floats, the others do too.

Well no not necessarily but you're on the right track. And if the supertanker sinks, so does almost everyone else. China's success, the way their economy is geared, is contingent on the US and Europe buying millions of tons of manufactuered "stuff".

 

[D-Mac]

China's success will be to the American's (and everyone else's) advantage. Increasing Chinese affluence means consumers can buy more, and they'll start wanting the things that are made (or designed -- where the money is) in the high-education industries in the US. The world economy is so linked that if one boat floats, the others do too.

My company sells a lot of semiconductors to native Chinese companies. My company wouldn't be so big if China didn't have a fairly high level of capability to design/assemble complex products and consume my company's products. I might not have a job if China high-tech industry wasn't as successful as it is.

Good point. However, although we may have a much, much higher PERCENTAGE of educated workers than China, in terms of absolute numbers (and density), we're gonna get swamped by both China and India.

Every day I get requests from 2-3 post-docs in China to work in my lab (a post-doc is typically someone with a PhD who is looking for work experience before seeking an academic job). The numbers are staggering. Some of these guys have earned 4 or 5 degrees in an attempt to get ahead.

To put it into content, per captia Canada is far ahead of the U.S. in college graduates, but the numbers just aren't there for them to be a world player (other than at curling and hockey of course!)

 

[tom5796]

There is certainly a major shift occurring, we all know that. What we don't know is how the economic shift will affect the political power shift at the global level, though economic forces usually drive everything in the long run. In my line of work, I focus specifically on the emerging economies of the world, and generally it is China that is seen to be having the most potential. Yes, communism is normally a drag, but China's not really communist in all areas, especially economic. Shanghai was built as a mainland model of Hong Kong in the hopes that it could duplicate their success. Many of the other new cities in the east also follow the model. And for a centrally planned government they are surprisingly federated when it comes down to it.

They keys to their success are infrastructure and education. If you've been to Beijing, Shanghai or any of the other tier 2 cities you'll find infrastructure that rivals the western world. They have used their capital wisely. Unlike in India, where you may experience a few power outages every day it seldom occurs in China. And the roadways make sense for the most part. The central planning element in infrastructure building has set them apart from India, which really is a loose collection of diverse states.

Regarding education, China's Tsinghua University rivals IIT in India and MIT in Cambridge. There is a reason why many of the leading edge technologies and research are being developed in China. More than you know. They are far from being a just a sweatshop nowadays. Let me give you some anecdotal information straight from the source. We hire about 80 university graduates each recruiting season. The initial number of resumes received is 15,000! We whittle that down to a few thousand and then issue an online test. Of those we choose the best 3-400 and start interviewing. at the end of the day we choose less than the top 1% of candidates. Sure there is more of a delta than the US between the top students and bottom students but the sheer numbers set them apart.

You might find this interesting: [ame="http://www.youtube.com/watch?v=WS_QENuOYL8"]YouTube - Two Million Minutes Trailer[/ame]

Here's a chart I often present. It's Goldman Sachs' long term view of economic powers.