Economic Downfall

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America, by many accounts, is already experiencing decline yet shall not be replaced by another power at any point soon. The resilience of the liberal order, the material and structural advantage accumulated by America has ensured that decline will be gradual. ‘Decline’ has manifested itself in cautious and pragmatic US foreign policy both economically and militarily, but there is little to suggest that there will be significant change to the status quo. Contenders to US hegemony, such as China, India and the EU, lack the material resources or political will to make American decline of paradigmatic magnitude. While in gradual decline, America will retain the mantle of global leadership for the remainder of this decade and beyond. Such decline may seem undesirable, but it has potential for good as the liberal economic order underwritten by the US has proven its instability since the turn of the millennium, leading to an uneasy balance in which American perpetually borrows to lend.[1] This system is unsustainable and needing reform. American decline is desirable as it could open discussion on replacing or reforming this economic order. The true extent of American decline will be explored below, examining the cases put forward regarding the America’s economic and military decline, and the ‘rise’ of other powers. It will become clear that while a marked decline in projection of power can be observed, no other state poses a credible challenge to America’s position as hegemon. While America remains the dominant power in the international system the case will be made below that there are grounds to be cautiously optimistic about a decline in American power. Since Kennedy’s suggestion of imperial overstretch, the discussion of decline has cyclically arisen, it has been stated that ‘[e]very ten years, it is decline time in the United States.’[2] Quinn suggests that this time is different – that decline can be observed through American military and economic power.[3] Since the end of the Cold War America has faced several challenges to its economic preponderance from both Asia and Europe resulting in its share of global economic output declining.[4] The 2007/8 financial crisis added weight to the declinist argument, with American national debt reaching unprecedented levels in 2011.[5] Dependence upon Asia, particularly China, to maintain global stability demonstrates a shift in economic power away from the US.[6] As the financial crisis broke it was not America, but Japan who rallied to bolster the position of the IMF while China became lender of last resort – contrasting with the American post war preponderance demonstrated through economic rescue efforts in Europe and Japan in 1945.[7] America has faced its greatest challenge to economic preponderance from China, which has maintained the most intense period of growth in economic history, some measures suggesting that it has leap-frogged America to become the world’s largest economy.[8] The crisis tested American resolve and capacity to lead, with mixed results. Obama spent the first six months in office preoccupied with the US economy, attempting to prevent its collapse.[9] This quasi-isolationism detracted from America’s role as global leader. The multipolarity of the global economic order in the twenty-first century contrasts with the US dominance of the latter twentieth century – demonstrating decline vis-à-vis its earlier preponderance. The response to the global financial crisis of 2007/8 signifies a shift from the hands-on leadership of the US that had become the norm the previous decade, and a potential shift towards Asia. Economic challenges may have exposed America’s relative decline in global power, but its military capabilities have also been called into question. Military power is inherently linked to economic strength, as it funds research and development, hardware, and the wages of the armed forces personnel. Thus, in experiencing economic decline it is not unfeasible...
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