Declinists often suggest America is in the midst of “imperial overstretch,” which will help hasten its fall. Is that right?
Not at all. Declinists have the British Empire in mind, but 100 years ago Britain had already been overtaken in population, steel production, military spending and GDP by the U.S. and Germany. Yet, unlike Britain, the U.S. still maintains an enormous lead over other possible competitors. At market engage rates (the comparative indicator preferred by the International Monetary Fund), the U.S. GDP this year is exactly twice the size of China’s. As for “overstretch,” we managed to maintain the world’s most advanced and capable military (including a volunteer army), fight two wars plus a global war on terror, and yet at the peak last year we spent just 5 percent of GDP on defense — a figure lower than the average during any of the Cold War years. The percentage is already on the way down, toward less than 4 percent by the middle of this decade. In short, our world role is affordable provided we make the needed decisions here at home.
What policies should policy makers put in place to help ensure another American century?
Develop long-term solutions to make sustainable our entitlement programs (Social Security, Medicare, Medicaid, veteran’s benefits). Reform tax and immigration policies. Bring federal spending more closely into alignment with revenues. This means reducing annual deficits to no more than 3 percent, the average from 1960 to 2007. Make effective use of our domestic energy resources, including natural gas, oil, nuclear power, hydroelectricity and – where practical and cost efficient – solar and wind power, along with sensible energy efficiency measures.In addition, tort reform would help significantly in managing health costs. It is scandalous that the Obamacare legislation neglected this. Also welcome would be reductions in excessive bureaucracy and regulation.
Sometimes those predicting American decline treat China as if it is on an unalterable upward trajectory. What major obstacles does China have to overcome in its rise?
China’s export-led growth model is unsustainable. It has a dangerous real estate bubble. It suffers from disastrous pollution of its air, water and food chain. Massive corruption and abuse of power are deeply resented. By some estimates, China had well over 100,000 civil disturbances last year. The model of state capitalism is not likely to be agile or effective as China becomes increasingly developed. Most important, rule by a Communist Party dictatorship will sooner or later become unsustainable.
How big of an obstacle to China’s rise is its low birthrate?
China’s one-child policy means that China will grow old before it grows rich. Over the next two decades, China’s demography becomes increasingly unfavorable as vast numbers of people retire while the proportion of those in the active work force declines.
