The End of a SuperPower?
First
it was Greece, then came Rome, succeeding them was The Kingdom of Great
Britain, and now it's the United States, or should I say was? Since they gained
their independence on July 4th, 1776, the United States has been the obvious
superpower of the world. Leading the way, for the most part, in technology
advancements, wealth, and overall world presence. It appears as though their
reign may be coming to an end for various reasons.
C.E.O's
across America are in a state of panic, living in fear of a complete economic
collapse. The main reason is the recent debt crisis and the falloff it has had
for most major companies countrywide. Top executives are worried about the
fiscal deficit and the current tax policy. Washington plans to decrease the
federal budget and cut spending by 600 billion. The plan also includes a tax
hike, which seems like a continuing trend. Over the last three years, the U.S
has watched their AAA credit rating diminish along with the highest
unemployment rate ever recorded in American history. The economic crisis that
is currently plaguing Europe is not helping matters; the U.S export sales have
seen a steady decline over the last quarter. Approximately 34% of U.S C.E.O's
plan to cut jobs over the next six months, which is up 20% over the last
quarter. (America sweats as U.S nears fiscal cliff-Reuters) It's
not just major corporations feeling the effect; hospitals, rehab center’s and
nursing homes are also expecting at least a 2% cut by January of 2013.
It
seems that all good things come to an end. Where will the U.S be in ten years?
Who is next to reign? Perhaps it's China's turn, or possibly a Middle Eastern country
like Dubai. Whoever it may be, one thing is evident; America is dabbling in
dangerous territory. In my opinion, China will soon control the world's
economy. They already have the world's second largest economy and it is growing
at average rate of 10% annually. In recent years China has implemented a number
of different strategies that have contributed to their growing success. One of
these being the introduction of new management systems that drastically
increased productivity. This has lead to greater foreign trade and a
substantial growth in overall GDP (gross domestic product). While the U.S
struggles to stay afloat, China continues to ride the wave towards economic
dominance.
I have to agree with you that America has major problems and will have to shift over for China as they are expected to be the largest economy in the world by 2020. They are consistently posting a trade surplus (exporting more vs. importing) and are remaining the ideal place to manufacture goods because of their relatively cheap labour.
ReplyDeleteAnother thing is China has the US right where they want them as they are holding a great deal of the US debt. This will definitely have an effect as to the way America acts when it comes to their economic foreign policy. The US might have to do some things that they necessarily don't favour just to appease the Chinese government. It will be interesting to see what happens on the world stage in the next decade when the economies recover and the emerging markets continue to develop.