Don't Give Up On The U.S.

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If the U.S. were a stock, it would be trading at historic lows. The budget deficit is out of control, the economy is anemic and the political system is controlled by academic ideologues and Chicago hacks. Opposing them is a force largely comprised of know-nothings--to call them Neanderthals would be too complimentary.

Not surprisingly, many Americans have become pessimistic. Two in three adults now fear their children will be worse off than they are. Nearly 40% think China will become the world's dominant power in the next 20 years, as indicated by a recent survey.

Yet, in spite of everything, I would still place my long-term bets on the U.S. Here's why:

1. The U.S. is the only advanced country in the world with viable demographics. By 2030, all our major rivals, save India, will be declining, with ever-larger numbers of retirees and a shrinking labor force. By 2050 Germany, Japan and South Korea could approach having twice as many people over 65 per capita as the U.S. By then, the U.S. will have 400 million people, which may be more than the entire EU and three times the population of our former archrival Russia.

2. In terms of energy resources, the U.S., combined with Canada, is the second richest region in the world after the Middle East. The country possesses vast resources of natural gas, about 90 years' worth, as well as strong areas for wind power. Given America's past profligacy, the country could derive considerable savings with even modest conservation efforts.

3. America remains the world's agricultural superpower, with the most arable land on the planet. With another 3 billion people expected on the planet by 2050, the U.S. should enjoy a continuing boom in food exports.

4. Military power matters now and in the future. We are not living in a Star Trek future of earthly harmony. The U.S. leads in military technology and, yes, our martial spirit remains a positive factor, despite the portrayals from Hollywood. For all its missteps, the U.S. military has achieved its strictly war-fighting missions--in Iraq and Afghanistan, as well as a host of smaller conflicts--over the past 20 years. Meanwhile, Europe and Japan have taken themselves out of the military game, and it will be decades before China will be ready for a head-to-head challenge.

5. There is no large country that comes close to the U.S. as an entrepreneurial hotbed (Taiwan, Israel and Hong Kong come close but are far smaller). The recent Legatum Prosperity Index showed the U.S. remains by far the largest generator of new ideas and companies on the planet.

Of course, all these critical advantages could be squandered by fecklessness. The empowered American left--in sharp contrast to the tradition that runs from Franklin Roosevelt and Harry Truman all the way to Bill Clinton--often envisions the U.S. as a country headed into the dustbin of history, and deservedly so.

Leftist historian Immanuel Wallerstein, for example, asserts that the U.S. has been "a fading global power" since the 1970s. The only question now, he suggests, is "whether the United States can devise a way to descend gradually, with minimum damage to the world, and to itself." Another leading liberal analyst, Parag Khanna, envisions a "shrunken" America that is lucky to eke out a meager existence between a "triumphant China" and a "retooled Europe."

The traditionally pro-American right increasingly shares this pessimism, albeit for different reasons. With Obama and the Democrats in power, many conservatives, including such keen observers as Charles Krauthammer and Victor Davis Hanson, believe the country has hit the historical skids.

Yet declinism is often overstated. Today, only someone delusional would suggest that once widely feared Japan, soon to fall to third place (behind China) as an economic power, constitutes a serious threat to American preeminence. However, the fantasy of a European resurgence remains deeply embedded among American policy wonks and academics. It is a firmly held belief despite the continent's decades of slow growth, demilitarization, disastrous demographics and mounting budget woes, particularly on its southern and eastern fringes.

On the other hand, China and India represent true ascendant economies of the next decade and beyond. China's rise has led one writer, the Guardian's Martin Jacques, author of When China Rules the World, to suggest that America must "learn to bow" before the great power of the 21st century.

Yet for all their impressive growth, neither China nor India possesses either the institutional strengths or natural resources of the U.S. China's current boom has much to do with an orgy of money-printing that would make Barack Obama blush. Real estate in some places is turning bubblish. There are reports of vacancy rates as high as 50% in Shanghai's commercial market.

India, as anyone who has spent time there knows, remains a highly fragmented and largely impoverished country. It will be a great power of the future, but a very poor one, which will take many decades, even a century, to approach even a decent fraction of America's current per capita income.

Often overlooked as well is America's unique advantage as an inclusive multiracial society. Over the past decade America has produced two African-American Secretaries of State and one President. America remains unique in its ability to absorb different races, religions and cultures, an increasingly critical factor in maintaining global preeminence.

What Americans need most now is to develop policies that build on our essential strengths. Some tech enthusiasts and members of the Obama Administration claim that "the age of infrastructure is over." However, in reality there is no way to assure a decent future for the next 100 million Americans without a major investment in everything from roads and broadband to transmission lines, water systems and basic skills training

Some conservatives may oppose such a domestic surge, but the investment reflects a strong American tradition. The critical issue will be to make sure a commitment to infrastructure does not morph into a Washington-led industrial policy that would inevitably reward the well connected and stunt our innovative edge.

In the end, Americans must remain true to our individualist traditions. Compared with Europeans, who instinctively look to government for guidance, the vast majority of Americans still believe that hard work is the key to self-improvement. Our primary economic asset continues to lie with entrepreneurial spirit and adaptability.

In the coming decade, American success will require precisely this blend of public support and private initiative. If the U.S. stays true to its unique traditions, it will remain the world's best investment for decades to come.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press early next year.



















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This is such a wonderful

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I think US is not in that

I think US is not in that huge problems as everyone screams. I think there are plenty of problems and all are related to huge dept and everything else feels irrelevant. People are spending too much time to complain about the things and less trying to find the real problems to things.

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Well, even though Americans

Well, even though Americans are concerned about their personal finances and sometimes even apply for additional cash advance to make ends meet, they still consider that the American dream is alive. According to the recent poll held by the Pew Charitable Trusts, only 32 percent of Americans think that their personal finances are good and excellent, while 68 percent of respondents feel that they have already achieve or will achieve the American dream. As for the Americans from both political parties, they think that the government needs to play an active part in promoting the economic mobility, the poll updating the Pew Economic Mobility Project shows. President Obama make his own proposal on US debt and deficits. In fact, the survey shows that Americans don’t feel that the US government does its best and 80% even say that the authorities are ineffective at helping the middle class and particularly the poor who still feel the need of cash advance.

Usa economy

The United States has a capitalist mixed economy, which is fueled by abundant natural resources, a well-developed infrastructure, and high productivity. According to the International Monetary Fund, the U.S. GDP of $14.870 trillion constitutes 24% of the gross world product at market exchange rates and almost 21% of the gross world product at purchasing power parity It has the largest national GDP in the world, though it is about 5% less than the GDP of the European Union at PPP in 2008. The country ranks ninth in the world in nominal GDP per capita and sixth in GDP per capita at PPP.

The United States is the largest importer of goods and third largest exporter, though exports per capita are relatively low. In 2008, the total U.S. trade deficit was $696 billion. Canada, China, Mexico, Japan, and Germany are its top trading partners. In 2007, vehicles constituted both the leading import and leading export commodity. Japan is the largest foreign holder of U.S. public debt, having surpassed China in early 2010. The United States ranks second in the Global Competitiveness Report.

Great Article - Some Thoughts, One Clarification

Really like your article. America is currently feeling great pessimism that hopefully turns around before it becomes self-fulfilling. The demographic phenomenon is very interesting. I'm sure you describe this in detail in your new book.

I've always wondered about the Chinese growth "miracle" where the government seems to create money and growth without having a transparent currency or government.

You made a comment about how continuing military strength is a source of advantage to the US. It would be interesting to understand how you rationalize that. So much of our taxes go to being the world security guarantor, that one would believe that free-riders would gain an advantage. It does not appear that US companies achieve any advantage over others. Doesn't this mirror how the US grew in the 1700-1800's while Europe expended energy on military conquest?

Your reference to the Obama admin claim of the "age of infrastructure is over" is actually incorrect. If you go to the link, it describes infrastructure development in a more efficient and sustainable fashion. This is something that should actually benefit the US in the long term. The Obama stimulus package is rather heavy on infrastructure and R&D spending.

All in all, it's nice to read a positive article about the US.

I agree with your point of

I agree with your point of view. American education is advanced and reasonable. American political system is the best. The most urgent need is to change Americans need to control over-consumption.

Not so sure

I'm not so bullish - you have to want to win - if we continue to emulate the emasculated former European powers we will follow them.

What it will take to make me bullish on America (again)

B. Hussein Obama not in the White House
Devocrats not in majority of either House of Congress.

Everything's Still Invented Here

I work with many companies in the semiconductor and alt energy businesses, and can tell you everything's still going to be invented here. China is fantastic at engineering, and provides a ridiculous supply of educated cheap workers who will do whatever you tell them to. But this reflects a very uncreative society. That's why they get a lot of outsourced manufacturing in fiber optics and alt energy, but there is no Chinese version of Thomas Edison, Steve Jobs, or Gordon Moore on the horizon.

Israel is very creative and entrepreneurial, but it's also tiny and hardly an economic threat. There are some solid European companies in power electronics, sensors, and biotech. But none of its bleeding edge and the technologists over there still need forward thinking Americans to develop marketing strategies.

Business skills are in very short supply over in Europe. A lot of fuzzy thinking and we're-out-of-here-at-5 cultures in their companies. Civil service is seen as a high calling there, stunning how many Eurobrits have no interest or ability to work for profit. Margaret Thatcher after her stroke still has more business sense than any of her countrymen.

Not the only country

"America remains unique in its ability to absorb different races, religions and cultures, an increasingly critical factor in maintaining global preeminence."

It seems to me that Canada is doing an excellent job in this respect. I also hold hope for Australia. Singapore is a successful multi-ethnic society.

Dave Barnes
+1.303.744.9024
http://www.MarketingTactics.com

your are correct

actually i was referring to major countries. certainly canada, australia and singapore qualify in this respect

but they are not our primary competitors

It's Morning in America

This article is mostly correct. The United States is still a young country, and the ideal on which it was founded - Life, Liberty, & the Pursuit of Happiness - is as valid today as it was 243 years ago. Krauthammer and Hanson are correct that we have a terrible administration now, but we've had terrible administrations in the past, and we're still around.

The Chinese economy is built on mirrors, and it will not be a significant competitor to the US in the foreseeable future. India, on the other hand, is a significant country and ultimately will be a world power. But India is a country with which we can do business.

Ronald Reagan was and remains right: It is morning in America.