For how much longer can the world's top borrower carry on being the world's top power?

[Ghost Dog]

""For how much longer", he (Larry Summers) asks, "can the world's top borrower carry on being the world's top power?" It's a good question."

The truly astonishing fact is the USA was, in 1950, the world's largest creditor nation. After the drain of the Vietnam war, it reached a point of balance around 1975 and by 2000 was by far the world's largest (ever) debtor. That this transition could have occurred in the space of fifty years is almost fictional. However, it does highlight the massive costs associated with being a military superpower and the transition from self-sufficiency in oil to becoming a major importer.

To return to Larry Summers' question, the answer is, of course, it cannot. Military power is invariably underpinned by economic power but there is usually a lag between the economic decline and the military decline so the USA will continue for some time to be the world's preeminent military power.

There is a strong parallel in British history. Britain had the world's largest economy until around 1875 when it was overtaken by the USA and pushed into third place ten years later by Germany around 1885. Despite this loss of economic supremacy, Britain continued to be a significant military (naval) power well into the 20th century.

Now the mantle of world economic supremacy will pass to China in the next decade or so and, with it, the certainty it will also become the world's preeminent military power by the middle or second half of this century.

The above, a comment on last night's opinion piece by Jeremy Warner, Assistant Editor of the (UK) Telegraph, "Fed's $600bn gamble risks throwing away America's biggest asset":

... Obama's punishment will make little if any difference to the mess the US economy finds itself in and in any case is something of a sideshow against the latest high risk policy initiative the Federal Reserve is visiting on an already battered nation. The Hill can't act, but the Fed still stands ready and willing at the roulette wheel.

The fresh $600bn (£372bn) infusion of quantitative easing announced on Wednesday may or may not provide a lift for beleaguered domestic demand – both Goldman Sachs and HSBC have said much more is needed to escape a real or imagined liquidity trap – but one thing it certainly does do is further debauch the currency. Never before has dollar hegemony been so much under threat.

By flooding the world economy with yet more freshly minted dollars, America further undermines faith in the greenback as an internationally reliable store of value and is thereby squandering an economic and geo-political asset of huge importance to the nation's history.

...

/... http://www.telegraph.co.uk/finance/comment/jeremy-warner/8108660/Feds-600bn-gamble-risks-throwing-away-Americas-biggest-asset.html


Is it my imagination or are there an increasing number of voices out there referring directly or obliquely to a putative "window of military opportunity" in which a failing and floundering US economic power can save its bacon by launching an all-out military effort to dominate or overthrow all national and regional governments and alliances and impose a One-World (Financial-Imperial) Government on every person on this planet and a life-style for the super-rich beyond the wildest dreams of Roman or Byzantine Aristocracies, Sultans, Pashas, Satraps, Rajas, Pharoahs or Medieval Feudal Despots, Bishops and Kings, backed by the boot of the most technologically-advanced and ubiquitous means of persuasion history has ever known?

Means of persuasion not only military, or police, but also in every home, in every head: the TV.

It is surely this agenda that is tearing the USA apart and changing it forever. It would surely be more intelligent to begin to rein in, draw down and cut back on military expenditure now and dedicate the returns to a planned infrastructure rebuild in the USA rather than face economic and cultural annihilation in the near future.

The effort, in any case, would be futile. A One-World (Community) Government of sorts will inevitably emerge, and would do so better through cooperation than through conflict, driven by the ineluctable necessities brought to light by advancing scientific knowledge of the fragility of earthly ecosystems and rational human societies.