George Bush, the Tax cuts and the collapse of American Power

[Rufus T. Firefly]

With regard to the premise of the original question: the tax cuts do not imperil US power. They do imperil US quality of life. The victims of the new debt will be -- and are already -- domestic programs and programs at the state level; the US will pay for its spending spree by sacrificing education, transportation infrastructure, health care, or anything else that has domestic but not international ramifications. The US will remain a superpower, because you can be a superpower without being a particularly pleasant place to live (like the USSR and China). But its quality of life will continue to fall to the point where even conservatives will be contemplating emigration to Europe.

[The Mad Monk]

Lucky that the US government takes a much smaller bite of the economy than most Western Countrys. The US economy is going to be very hard to damage. Their productivity and investment levels are still extremely high compared to most European nations, and as long as there is appropriate investment in the up-and coming business sectors, they should do fine.

The communications/internet/biotech economies were largely driven by State, particularly Pentagon, funding. Hopefully these can stand on their own two feet now. I predict the next growth industry will be cheap explosives and high-technology firearms to feed your satanic war machine

[The Mad Monk]

(must not disappoint the fans, y'know)

[Dinner]

Biotech was and will continue to be mostly a priviate enterprise.

[GePap]

Biotech research will become more wordwide, since it does not take the same amount of resources to do bioreseacrh, as lets say, physics research. Places like Cuba and Brazil already have successful biotech research, and they are relatively poor. As for Electronics and the Internet, the Japanese are right there with the US, and other places like Korea are catching up fast. Technology will not be what keep the US in the lead (as it is, many armies, if they shifted spending could aquire smart weapons and so forth for cheap): it is the existing infrastructure. It would take decades for other states to build the shipyards, research facilities, and most importantly, estblish the space assets that keep the US ahead, So the continuation of the US lead will be based on the fact that we have already spent trillions on various things needed to have a military with global reach, while other state have not.

[el freako]

Originally posted by DanS
I'm guessing that India's (productivity growth) has been respectable over the last 20?

Quite respectable, however it has still been behind china's very impressive levels (and yes, I am adjusting for the inflated Chinese growth rates - using PWT 6.1 data)

Originally posted by Evil Knevil
The US economy is going to be very hard to damage. Their productivity and investment levels are still extremely high compared to most European nations, and as long as there is appropriate investment in the up-and coming business sectors, they should do fine.

- Obviously posted by someone who didn't bother to check the fact's first

Europe contains the most productive workers on the planet:
Norwegans: 32% more productive than the Americans
Dutch: 19% more productive than the Americans
Belgians: 10% more productive than the Americans
Italians: 5% more productive than the Americans
French: 3% more productive than the Americans

The average for the EU is 90% of the US level - considerably ahead of Canada's 82%, Australia's 77% and Japan's 72%

(figures relate to GDP per hour worked, source: OECD)

As for investment, well the US's investment level (investment/GDP) has been below the EU's since the second world war - it came to within spitting distance in 2000 (20.1% for the US, 20.7% for the EU) but has since fallen away.

Also as the US relies on foreign financing for all of it's net investment (i.e. that required to make it's capital stock grow) it is hostage to the willingness of foreigners to finance it.

[Sandman]

China will probably still have an economic lead on India in 50 years. China's twenty years ahead of India in terms of development, I can't see India closing that gap in just fifty years.

[Evil Knevil]

El Freako ... really?

My mistake, I always thought that US investment was higher than that of the EU nations....

I therefore surrender, and my opinions on this subject are to be ridiculed and ignored

[el freako]

Yup Europe (and Japan) have spent a higher proportion of their incomes on investment for decades.

That said the US get's more 'bang per buck' from it's investment (it's capital productivity growth is higher)

[Sarxis]

Originally posted by el freako
... the US can't have low taxes... and pay for the baby boomers retirement.

Soylent Green.

[The Andy-Man]

I think this 'China will be superpower in 2010' is just anti-american optimism. I would to like to see US power challanged, and a multi lateral world develop, but this is still a long way off, cos the EU is just going to stagnate with protectionism, and china still needs to grow whilst india is a long way behind china.

I think it was el freako who bought up the 19thC british comparison, and he is write. The reality is the US is already incredibley weak, its just no one has built to sort of military that can give them a similar role in world affairs, and no one has the sort of cash either.

[PLATO]

Originally posted by The Andy-Man
The reality is the US is already incredibley weak, its just no one has built to sort of military that can give them a similar role in world affairs, and no one has the sort of cash either.

weak compared to what??

That is a ridiculous statement. The only thing that the US military is weak compared to is unrealistic US citizen's expectations.

Let's not forget that we have projected our Army to the other side of the planet and conquered two countries, both within a matter of weeks. No other military in the world could even dream of that kind of feat nor are they likely to in the foreseeable future.

[el freako]

Originally posted by PLATO
weak compared to what??

Other nations in their period of superpowerdom

Originally posted by PLATO
Let's not forget that we have projected our Army to the other side of the planet and conquered two countries, both within a matter of weeks.

And it's streached your army to it's limits to do so - compare that to Britian's performance 120 years ago, and remember that it spent a third of the proportion of it's economy on defence as you do now.

Originally posted by PLATO
No other military in the world could even dream of that kind of feat nor are they likely to in the foreseeable future.

It would take the EU or China less than a decade to rival the US's military power if they seriously wanted to, they would have to spend quite a bit of cash but they could do it (remember it took less than a decade for the US to gain it's superpower status).

[johncmcleod]

This is a great thread because I have never seen such an intelligent, non-spamming thread on America.

Bush is really screwing us. He cut taxes to gain voters, and then increased military spending. By doing this he is then able to invade Iraq, Afghanistan, and whoever is next. By invading those countries he is gaining many more voters, and that is the only reason he did invade them. IMO Bush is not an idiot. He knows exactly what he is doing when he is hurting America, he does it to keep himself in power. And when he gets re-elected he'll do the same. The bad effects of his policy will really start to hurt us say 10 years from now, but by then he'll no longer be president. No more then two terms in a row is the law.

If I were in the presidency I would cut WAY back on military spending, considerably raise taxes for the rich, and tax investement profits. With all the extra money coming in I'd first spend it on the UN (if I were president I'd try to completely reform the UN, one of the many things I'd do is make the UN an independent fighting force with heavy weapons and better troops, which would cost a lot of money, which means making the nations of the world pay more to the UN) so if a country actually did need regime chance or whatever the UN would do it, which is a whole lot better then international. The US does really not NEED to be a superpower. We can have a great quality of life without it. All that can be gained by being a superpower is just bullying other countries.

Next I would use some of the newly earned money to pay off our big debt. And after that has been taken care of I would begin the transition to communism. Once that happens more will be spent on creating jobs.

The problem is with cutting back on military spending you are making a lot of people lose jobs, but it would still end up being better for the economy.

[DanS]

Other nations in their period of superpowerdom

That's ridiculous. We're quite strong for a superpower, considering especially that there have been very, very few superpowers. We have military in how many countries? Over 100? No army could challenge us anywhere, on our turf or theirs, including Europe's in aggregate (excluding the UK, which has explicitly thrown its lot in with the US).

We're weak only for a unipole, because the type of operation that we are capable of doing is limited by inclination and reality. For instance, it would be difficult if not impossible to defeat and occupy China even if we wanted to. Defeating and occupying Iran would be a stretch, unless we really started to rearm our military. I laugh when I hear us compared to the Roman Empire, for instance, considering that the UK could have done these things (and did do these things) in its heyday. Of course, we could have done these things too in ours, but luckily we took a smaller target (Japan) and continued to eschew wasteful empire-building. Or at least we wasted no more than was necessary for our goals.

Overall, it is more accurate to call us the sole remaining superpower rather than a global hegemon, since we are such a weak unipole. Don't get me wrong, we're probably a unipole, since if you arrayed all of the world's armies together against the US, the US would make pretty short work of it. But this predominance will probably only last another 20 or 30 years. Maybe a little longer, if others make mistakes or are disinclined to challenge us (I consider this likely). But your economic math is true no matter what the US does--that is, unless in the unlikely event we went on a global rampage.