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DANIEL HENNINGER: America as Less Than No. 1 – WSJ.com

August 11, 2011

America as Less Than No. 1

By DANIEL HENNINGER

WONDER LAND AUGUST 11, 2011

So this is a taste of what it will be like when the American superpower starts shrinking. Enjoying it yet?

After the humiliation of the United States losing its AAA credit rating; after watching the American stock market descend into chaos; after living for two years in a $15 trillion economy unable to grow beyond 2%, with unemployment rates rarely experienced in the U.S., Americans have their first whiff of inhabiting an empire in decline.

You could divide the country between those who think that it wouldn’t be the worst thing for the U.S. to enter the long, falling autumn of its life, as has Western Europe; and those who refuse to go down, who’d do whatever they must to hold the world’s No. 1 ranking.

Daniel Hennniger discusses that this is what being a shrinking superpower will feel like-enjoying it yet?

The U.S. is far from finished. The private economy—from the biggest corporations to innumerable dreamers launching start-ups—is fit and eager. But make no mistake: The U.S. has taken a hard hit to its 65-year status as the world’s pre-eminent nation.

Uncle Sam at the moment is seated in his corner of the global ring, gasping for breath, and no doubt he’ll come off the stool. But the cynical men in other capitals—Beijing, Tehran, Moscow, Paris, elsewhere—will be watching now to see just how much fight the old boy has left in him.

The Standard and Poor’s downgrade is nothing more than bloodless analysts looking at the grim mathematical reality of this country’s long-term social commitments and its ability to pay for them. Something has to give, and what they see bending is the long-term growth rate that since about 1876 raised the U.S. to its current pre-eminence. If growth goes, your status goes. It’s not complicated. Ask Britain, once glorious but now burning.

In his magisterial study of world growth since the year 1000, the late economist Angus Maddison noted that the “golden age” for growth lasted from 1950 to 1973, with world per-capita GDP growing at 3%. Then in 1973 growth slowed in the U.S.’s “follower” countries of Western Europe and Japan: “Some slowdown in these countries was warranted, but policy failings [my emphasis] made it bigger than it need have been.”

via Henninger: America as Less Than No. 1 – WSJ.com.

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