USA: the not so 'super' superpower

geog blog #2

There are always so many stories about the decline of the USA, here is just one and then my opinion on the whole thing- this piece was actually written back in August.

http://www.bbc.co.uk/news/world-us-canada-19667754 

With globalisation and the increasing economic interdependency between countries growing; wealth, knowledge and power are becoming more equitably distributed throughout the world. Where in the past the United States of America held practically worldwide dominance, its power is beginning to dwindle. When looking at the concept of 'superpowers' we must look at four key areas, cultural, economic, demographic and military. It is the final aspect of the military that allows a country to begin to achieve 'superpower' status.

In 2011 the USA spent $711 billion on their military out of a worldwide total of only $1630billion. The next highest level of military expenditure was China with a mere $143 billion spent. The difference in military spending is staggering and it is this high level of military spending that allows the USA to achieve full spectrum dominance. By this I mean it holds control of such a large proportion of the global military resources.

There is evidence of not only globalisation but also 'Americanisation' throughout the world. There are McDonald's restaurants in 118 countries worldwide, no other food outlet that could ever challenge this coverage. Looking at the cultural perspective, English has become the global language, there are more native speakers of Spanish and Mandarin than there are of English. However, English is the most spoken language in the world individuals learn it to enable them to engage with people on an international platform.

There are international organisations that represent a multitude of nations on a variety of issues. These include the World Bank, the International Monetary Fund (IMF) and the United Nations. The headquarters of the World Bank and IMF are in Washington and the UN in New York City. These political institutions are primarily based in the USA giving some indication of the political power currently held by the USA.

Thus far we can see that the USA has full spectrum dominance, cultural spread like no other country and political power across the globe. Despite this I believe that the USA is on a downward spiral.

The USA currently has debts of $15.85 trillion. This is combined of both public debts and Government debts. Firstly reducing the Government debt, public spending needs to decrease and tax revenue must increase, this will involve running a tight monetary policy so that a situation of fiscal surplus can be achieved. If a situation of fiscal surplus could be achieved then planned Government spending is less than planned tax income and therefore that revenue can be spent in paying off the debts. The largest problem is that with Government spending decreasing, consequently  expenditure on public services will decrease and inevitably involve cuts to the military.  Whilst large cuts must happen to even bring the USA into the same league as other countries when it comes to military spending counties such as China are doing the opposite. The Chinese economy is currently very successful because it is an economy based on manufacturing and producing goods and services. This high level of output gives China a very low unemployment rates and therefore higher levels of tax revenue. This enables China to run a fiscal surplus and is therefore able to increase its spending on public sectors, including the military. Therefore US spending on the military will decrease while simultaneously Chinese expenditure will increase. Therefore the military power currently held by the USA will rapidly drop and other countries could potentially overtake it.

The USA must also look to decrease the private debt held by US citizens. A large proportion of the US population lives a lifestyle which is based on spending and mass consumerism. When these individuals were unable to finance their demand with their own disposable income they turned to credit cards and loans from the banks. In order to decrease the level of public debt the Government must enforce a contractionary fiscal policy which aims to reduce aggregate demand within an economy. This is achieved by raising interest rates which increases the cost of borrowing money and also increases the incentive to save. People then choose to save a higher proportion of their disposable income, so consumption will decrease and aggregate demand falls. As aggregate demand falls US firms and businesses that are dependant on consumers will begin to suffer and will no longer be so successful. This will reduce the company profits, reduce their revenue and decrease their global reach.

The USA must sort out its economy to benefit the citizens and also to keep a sustainable country alive. Reducing its debts will create issues politically, militarily and also culturally. Is it to be expected that in 50 years time it will not be McDonald's restaurants in every country but rather a worldwide recognised Chinese noodle bar?

TR

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