Meltdown: America's Waning Days?

It is so hard to be positive and optimistic about the future. For years leading up to the current fix we find ourselves in I simply rejected the doomsayers - and for good reason. For one, I was not ready to give up on America, Mother, apple pie and Chevrolet. Two, at the time the evidence didn't support such a pessimistic outlook. I believe we are as much a victim of self-fulfilling prophesies as we are being slapped by reality. How much of today's market meltdown and consumer (un)confidence is pure psychology? Much of it?

The things I personally believed in such as the American middle class lifestyle, free-market capitalism, the Catholic Church, GM cars, rock music, meat-based diets, conservatism, cheap gas, rising incomes, the Minnesota dream( a lake front cabin w/a boat) and happy, well adjusted children are all under assault these days. Nothing we have been programed to take for granted is safe anymore. I could go on and on, but you get the idea.

The question is: Is it over for America?

Maybe not. Even when you consider that we have huge and looming problems as a nation our starting point as compared to the rest of the world is our ace in the whole. It has been said that when America catches a cold the rest of the world gets pneumonia. I think this is mostly true considering that the subprime mortgage disaster that set off this economic tailspin occurred in the U.S. and has now affected the entire global economy. Amazingly America has prospered despite everything the Congress, the unions and big business has done to neuter our competitiveness with our foreign rivals. Of course there is only so much even the remarkable resilience of the American backbone can withstand. We may be buckling, but so is the rest of the world.

According to Rod Hunter of The American Magazine "Demographic and economic trends suggest that the age of American dominance won’t end anytime soon."

Mr. Hunter goes on to point out some important trends that face economic giants in Europe and Japan and the emerging giants of China and India that do not favor a massive hegemony shift. In his article "America is Not Declining" he points to Robert Shapiro the author of "Futurecast" who cites analysis that suggests the United States will remain the leading global power, but Europe, Japan, and China, meanwhile, have reason to worry.

He goes on to report:
In Europe and Japan, where labor forces are already shrinking, fewer workers will have to pay more taxes to support the growing pensioner population, triggering a vicious economic cycle. Workers will have less money to save. That will mean less investment, which will translate into slower productivity growth and sluggish income progress, making it ever harder for the fewer workers to support the pensions of more seniors.
China will face similar challenges. Thanks to its notorious one-child policy, it has the world’s most rapidly aging population: between 2005 and 2020, the number of Chinese aged 65 and over will grow by 65 percent. China does not offer much government support for its elderly, which may lead to unrest, particularly among seniors living in urban centers such as Beijing and Shanghai.
The United States faces a more encouraging demographic future. To be sure, it will need to make adjustments and reform its entitlement programs. But America has maintained higher fertility rates than the countries of Europe and Japan, and its population has been rejuvenated by two generations of high immigration.

Similar aurguments were made in Mark Steyn's bestselling book "America Alone". Steyn went on to highlight the assent of non-productive (in the Western economic sense) Muslim populations in Europe that will further erode the fragile welfare states of France, Germany and England.

Where Russia and India are concerned one is most likely to decline precipitously while the other will slowly improve. Russia faces a severe demographic problem that is unlikely to be reversed particularly if a prolonged global recession devastates Russia's energy industry - it's all they have.

India on the other hand will one day eclipse China in population and will have such a servere poverty problem that their global economic progress will be hampered. However, since turning away from rabid socialism they have attracted foreign investment that can tap into a growing educated class which bodes well for long term Indian prospects.

I still have hope for this country. I believe in the American experiment and that a well tempered capitalist approach to economics is preferable to full fledged socialism. We need to work on the "well tempered" part. Who knows what will get with Obama, Reid and Pelosi???

Godspeed to us all.



CW