America in Decline?

[Zealot]

The US now has a national debt totaling over $16 trillion in a $15 trillion (GDP) economy. Starting from the 1970s the neoliberals pushed through their economic and foreign policies, which has made the government incapable of responding to the capitalist crisis. It therefore seems that the US will have a hard time implementing a Keynesian solution to this problem. By comparison, China is doing relatively well and has started to assert more of its authority. What does this mean for the future of the United States? Will we see a huge decline in its power over the next few decades or do you think that they have the capacity to respond to the capitalist crisis?

[jookyle]

It's not so much that America is on decline, it's that America is no longer the power in the world. There are other countries, China being at the top of that list, which now can compete against America's power, which before, had gone uncontested. It's not really that America has declined in that sense but that it stalled and other countries continues to grow.

[Let's Get Free]

Yeah, I think the U.S. might be at the point of no return with the debt.

[Jimmie Higgins]

The US is experiencing relative economic decline. Old school kensianism would be a way to mitigate or manage the crisis, but it has never been able to "prevent" or "fix" crisis. It took a re-ordering of global capitalism and the destruction of huge chuncks of Europe and Asia's productive capacity for the US economy to be "fixed" after the Great Depression.

Besides, the Kensian ship has already sailed for the US ruling class - their answer is the same as the other powers: austerity. There are some prominent political wonks who are arguing for a new Kensianism, and if there is another crisis or things change, then their ideas and policies might become "plan B" but as things stand right now, their goal is to recover the economy on the backs of working class living standards and lowering labor costs.

But the US in a general sense is not in decline - Capitalist power requires economic and military power and while the US now has some economic competition, it's military ensures that it still gets to call the shots on most things in the world.

It's actually a pretty dangerous situation because the US will have to lean more heavily on military might to maintain it's hold on things. When it was still just a regional power, US imperialism would engage in military action, but would also try and present itself as the "more fair" imperilist compared to older European powers. Now this situation is the opposite and China and other countries pose as the more reasonable power to deal with while the US has to throw it's power around more.

[Rafiq]

The US now has a national debt totaling over $16 trillion in a $15 trillion (GDP) economy. Starting from the 1970s the neoliberals pushed through their economic and foreign policies, which has made the government incapable of responding to the capitalist crisis. It therefore seems that the US will have a hard time implementing a Keynesian solution to this problem.

The fruits of the second world war are at an end, and capitalism cannot sustain the welfare state of the 70's. I mean, the purpose of Neoliberalism was a means of reacting to the crises of capitalism in the early 1970's, which you cannot hold accountable for neoliberalism. Remember, capital cannot be constrained by a boundary, i.e. to actually 'deal' with the crises head on.



By comparison, China is doing relatively well and has started to assert more of its authority. What does this mean for the future of the United States? Will we see a huge decline in its power over the next few decades or do you think that they have the capacity to respond to the capitalist crisis?


No. The United States as a power with global hegemony is no more.

[Psy]

The US is not in decline, rather US imperial dominance is in decline just as Britian's was after WWI not because Britain/the US was/is weaker but because competitors are stronger.

US national debt is not really a problem, Japan has had much more debt then the US (for the size of their economy) for some time and basically proves debt is meaningless as it just means the bourgeoisie state owes money to the bourgeoisie it serves.

[Comrade Samuel]

I think it will be quite some time before we really need to seriously consider the implications of the collapse of America but there isn't a doubt in my mind that if we don't get our act together and stop holding onto the past while the rest of the world keeps progressing it can and eventually will lead to the end of this country.

The debt certainly isn't slowing the process either.

[Prof. Oblivion]

which has made the government incapable of responding to the capitalist crisis.

The US government responded to such a large extent as to be unprecedented in world history...


It therefore seems that the US will have a hard time implementing a Keynesian solution to this problem.

The US is not interested in implementing a "Keynesian" solution to the problem because it is controlled by politicians, not economists.


By comparison, China is doing relatively well

This pretty much concludes, in my opinion, that you have no idea what you're talking about. China is not doing "relatively well".

[Zealot]

The US government responded to such a large extent as to be unprecedented in world history...

Shit, really? They haven't even implemented an FDR-style plan yet.


The US is not interested in implementing a "Keynesian" solution to the problem because it is controlled by politicians, not economists.

"This pretty much concludes, in my opinion, that you have no idea what you're talking about."


This pretty much concludes, in my opinion, that you have no idea what you're talking about. China is not doing "relatively well".

They are doing relatively well. What don't you understand about that.

[Workers-Control-Over-Prod]

The US now has a national debt totaling over $16 trillion in a $15 trillion (GDP) economy. Starting from the 1970s the neoliberals pushed through their economic and foreign policies, which has made the government incapable of responding to the capitalist crisis. It therefore seems that the US will have a hard time implementing a Keynesian solution to this problem. By comparison, China is doing relatively well and has started to assert more of its authority. What does this mean for the future of the United States? Will we see a huge decline in its power over the next few decades or do you think that they have the capacity to respond to the capitalist crisis?

US is an Empire (http://www.youtube.com/watch?v=5vxlFuTcUQc). So long it has its military consume 50% of the world's military expenditures, it will be the dominant force. If China makes increasing moves to demand weapons to be sold to it (and already such demands are in the minds of Chinese policy makers), the US won't give in, they will most likely use their last trump: the military.

Look at all the bases it has. Japan in Asia, Germany in Europe.
Revolution will be impossible in these two countries so long they exist, hence a prerequisite to revolution would need to be popular demands to send 'the Yankees Home'. The US bourgeoisie are in my opinion becoming ever increasingly irrational actors, openly talking about ways how to create a False Flag attack to get to Iran, complaining about Obama's unwillingness to do it now etc.

[Zealot]

The US is not in decline, rather US imperial dominance is in decline just as Britian's was after WWI not because Britain/the US was/is weaker but because competitors are stronger.

US national debt is not really a problem, Japan has had much more debt then the US (for the size of their economy) for some time and basically proves debt is meaningless as it just means the bourgeoisie state owes money to the bourgeoisie it serves.

Debt is only a non-problem when the economy is booming but it's now in a recession. The bourgeois state can only pay back its money if they have a mechanism to collect it which, as far as I can see, is not possible considering that the neoliberal era smashed taxes and any significant traces of Keynesianism. Moreover, the US isn't just any country; it's the "heart of the empire". Romney plans further tax cuts in the US, which is code for austerity.

[ComradeOm]

US is an Empire (http://www.youtube.com/watch?v=5vxlFuTcUQc). So long it has its military consume 50% of the world's military expenditures, it will be the dominant force. If China makes increasing moves to demand weapons to be sold to it (and already such demands are in the minds of Chinese policy makers), the US won't give in, they will most likely use their last trump: the militaryHow did that work out in Iraq and Afghanistan?

The apex of US imperial power was surely the turn of the millennium when it could reasonably be described as a hyperpower. The invasions in the Middle East were however an unmitigated disaster for the US state in that they revealed just how limited its military power actually is. Sure, missiles can be sent anywhere but there is no longer the illusion that it is the gendarme de le monde. Everyone saw the vaunted US military get bogged down fighting kids with guns and everyone, including Washington, knows how that placed severe strain on both the military and economic infrastructure

Of course, the very fact that we know this - that the US was forced to go into Iraq effectively on its own - is a testament to the degree to which US diplomatic influence and economic clout has dwindled since the halcyon days of the 1990s. There's no question that the relative decline has been marked

This shouldn't however detract from the reality that the US is still a superpower and nor should it give credit to Republican 'broken US' rhetoric (http://nymag.com/news/frank-rich/declining-america-2012-7/) or hype over China. We're not even in a multi-polar world yet. The US is still the top dog and will likely remain so for the foreseeable future. That has little to do with its military might however

[Positivist]

While the US military retains its hegemonic dominance in the world, general economic stagnation in the US has had real consequences in terms of international purchasing. The US was recently overtaken as the top international purchaser meaning that it has been replaced as the chief director of production. This means that the net majority of production will be oriented towards the demands of a country other than the US for the first time in 70 years. This is the consequence of a stagnant general economy and a decline in real wages spanning nearly 30 years. Meanwhile, the Chinese economy continues to experience annual growth exceeding 7% and the dour ling of wages over the past year alone.

While this shift in spending has mostly been in the capital goods market we can expect to see further development of the Chinese domestic market as well and consequently the relocation of much of the industrial production currently hosted there. This is more than just speculation too with economists and corporations alike suggesting much the same route as the best path to prosperity. This refocusing of general production will eventually level out the global productive-consumptive relations and and will force the US to increasingly rely on dispossession to amass wealth.

Despite this, much of the US bourgiose is not really threatened. US corporations remain to dominate global capital, and so will be able to perpetuate their wealth given they don't invest it idiotically. What we will likely see with the US bourgiose is a sort of "renumeration" of the class into those of other national economies, especially the Chinese.

[Prometeo liberado]

The US is not in decline, rather US imperial dominance is in decline just as Britian's was after WWI not because Britain/the US was/is weaker but because competitors are stronger.

US national debt is not really a problem, Japan has had much more debt then the US (for the size of their economy) for some time and basically proves debt is meaningless as it just means the bourgeoisie state owes money to the bourgeoisie it serves.

I wouldn't go so far as to say that the debt is not really a problem. What is not factored into the the actual National Debt is the personal debt that is ultimatley underwritten by the U.S. government. Credit cards, student loans(which has exceeded cc debt) and the new form of debt which is retirees penions which have been decimated. Take all of that and the fact that Social Security is being mismanaged into oblivion and what you have is the so called perfect storm of debt. Monies owed or counted on that is not there.

[Prof. Oblivion]

Debt is only a non-problem when the economy is booming but it's now in a recession. The bourgeois state can only pay back its money if they have a mechanism to collect it which, as far as I can see, is not possible considering that the neoliberal era smashed taxes and any significant traces of Keynesianism. Moreover, the US isn't just any country; it's the "heart of the empire". Romney plans further tax cuts in the US, which is code for austerity.

The government doesn't fund its spending through taxation. Debt and funding are not problems at the federal level. If you understood that then you would understand that austerity is a choice and not a necessity, and would stop asserting monetarist nonsense.

Keynesianism never was implemented, either. And tax cuts are not synonymous with austerity. Keynes opposed raising taxes in a recession; I'm his opinion thy is suicide. You seem to be very confused about all this.

[Zealot]

"austerity is a choice and not a necessity"

That's all I really need to hear from you.

[Positivist]

The government doesn't fund its spending through taxation. Debt and funding are not problems at the federal level. If you understood that then you would understand that austerity is a choice and not a necessity, and would stop asserting monetarist nonsense.

Keynesianism never was implemented, either. And tax cuts are not synonymous with austerity. Keynes opposed raising taxes in a recession; I'm his opinion thy is suicide. You seem to be very confused about all this.

You keep saying that debt is not a problem and I understand your reasoning but it very well can be. For one thing, if economic growth continues to decline, eventually sufficient funds to repay the debt will not be generated. This presents itself as a real threat when you consider the depths to which the rate of profit has fallen. Furthermore, debt builds dependency on the debtors, most of which are Chinese, a problem if the two ever came into military conflict. Debt may not be as urgent as a problem as the monetarists assert, but following the further development of China's consumer goods market and continued stagnation it will be soon.

[Lynx]

If the US were to default on the USD treasuries held by China, it would be a political decision, not a financial one.

[Prof. Oblivion]

You keep saying that debt is not a problem and I understand your reasoning but it very well can be. For one thing, if economic growth continues to decline, eventually sufficient funds to repay the debt will not be generated. This presents itself as a real threat when you consider the depths to which the rate of profit has fallen. Furthermore, debt builds dependency on the debtors, most of which are Chinese, a problem if the two ever came into military conflict. Debt may not be as urgent as a problem as the monetarists assert, but following the further development of China's consumer goods market and continued stagnation it will be soon.

Well I never said that debt could never be a problem. That's obviously not true; just look at Greece.

As for paying back the debt, this is done every day. Treasuries are paid their coupon rate as well as the face value at the time of maturity. The US government can't run out of money to pay the debt because to make those payments they issue further securities. The problem with an economic slowdown is never the inability to pay debt - this simply won't happen - but rather the effects of increasing the debt-to-GDP ratio in a period of economic contraction.

As for dependency, China holds less than 10% of US debt. While this is a large amount in relative terms, this is not as much as you are making it out to be. China flat-out refusing to further purchase US debt securities would have severe implications on the national and international economies (including China's). But this is pretty much as probable as the US refusing to issue more debt securities; it's unrealistic. The US and China are not going to engage in serious military conflict any time soon, either.

As for the more general statement, "debt builds dependency on the debtors," this is only partially true. Debt is a contract between two parties, both of which are dependent on the terms of the contract. The debtor is dependent upon the creditor because they are required to pay the creditor back on the terms negotiated; but the creditor is also dependent because they depend on the debtor paying them back. A good example of this is the unwinding of MBS products following the bursting of the housing bubble, causing over-leveraged firms (mostly hedge funds) to go under.

[Positivist]

As for dependency, China holds less than 10% of US debt. While this is a large amount in relative terms, this is not as much as you are making it out to be. China flat-out refusing to further purchase US debt securities would have severe implications on the national and international economies (including China's). But this is pretty much as probable as the US refusing to issue more debt securities; it's unrealistic. The US and China are not going to engage in serious military conflict any time soon, either.

Well as I am basing my analysis off of a projection into the relatively distant future, yes the chinese share of US debt could not be crippling and military conflict is about as likely as conflict with martians. Though, as time progresses if spending is not addressed and as China continues to develop these risks COULD emerge, not to say they necessarily would.

[Psy]

Well as I am basing my analysis off of a projection into the relatively distant future, yes the chinese share of US debt could not be crippling and military conflict is about as likely as conflict with martians.

More like the US invading China would probably go as well as Imperial's Japan invasion, China is huge and a massive population thus like Russia would basically be suicide for any army that tries.



Though, as time progresses if spending is not addressed and as China continues to develop these risks COULD emerge, not to say they necessarily would.
Debt in itself won't do anything as debt is just a way for the bourgeoisie to transfer future surplus value into the present. Having debt become toxic is not a problem with too much debt but caused by lack of enough surplus value materializing to back that debt.

[Positivist]

More like the US invading China would probably go as well as Imperial's Japan invasion, China is huge and a massive population thus like Russia would basically be suicide for any army that tries.

Debt in itself won't do anything as debt is just a way for the bourgeoisie to transfer future surplus value into the present. Having debt become toxic is not a problem with too much debt but caused by lack of enough surplus value materializing to back that debt.

I'm not talking about an invasion at all, more like aerial/naval conflict and perhaps some fighting in areas of joint economic interest.

And presumably it is harder to produce enough surplus value to back that debt, if there is more of it, no?

[Take The Long Way Home]

This is so sad,we are trading freaking numbers with each other.

And i still don't get it,why did the bankers gave so much numbers to the people who weren't able to pay them those numbers back?

[Bakunin Knight]

I think America is in big trouble. If interest rates rise, default on debt is a strong possibility, in which case a Greece-like situation follows. I'm sure, however, that the elites would be able to come up with a military distraction in order to avoid such an outcome. Alternatively, they could just let the US fall and move onto a new host.