United States - A superpower in decline Term Paper

United States - A superpower in decline - Term Paper Example Global media is abuzz with news, opinions and predictions on the decline of the US, and there are innumerable ‘foretellers’ assuming the rise of other would-be superpowers, especially China. Theories of world domination by emerging economies have always been around, however, it is yet to be seen if the superpower status of the US actually caves in. Are US powers really declining? The answers to this question are extremely elusive especially in light of the fact that even after severe economic crises in the past, the US has successfully bounced back to stable conditions, retaining its economic and political dominance. This paper attempts to analyze the current status of economic and military power of the US, in order to investigate the ‘assumed’ decline of the power of this nation. The present economic situation in the US, the extreme debt crisis topped with public protests such as Occupy Wall Street demonstrate the gravity of the U.S situation. Most economists worldwide have even gone to the extent of analogizing it to the Great Depression. It is believed that the present crisis will consume the nation and that it is a harbinger of the US downfall from power. Although the US economy is currently under recovery, the percentage decline in median annual household income is greater than it was during the previous recession. The decline in income during the period of recession from 2007 – 2009 was 3.2%, which increased to 6.7% by June 2011 (Berman). Lack of growth in income coupled with the sluggish job growth has marred the U.S’s once enviable job market. It is in fact feared that the US will trip back into another recession. In another major drawback, the US lost its AAA credit rating, downgrading it to AA+ status. As the dollar is under threat and the US debt burden mounts up, it is speculated that within a decade or so, China, with a GDP growth rate of 9.8% as of 2010, will outgrow the US, whose GDP growth rate is only 3.10% (World Bank). The Chinese Yuan may replace the US dollar as the world’s reserve currency. This scenario reminds of earlier predictions in the 1980s when it was foretold that Japan would be a superpower, which however did not come true. This proves the inconsistency and fallibility of such predictions. However, the avowal that the US economic and military power is in decline, stands true, as will be discussed in the following sections. 2. The US Economy Economy is a major determinant of world power and the size of the economy influences its position in the world market. The US economy is analyzed here, in terms of growth, export, import, innovation, natural resources and trade. 2.1 Growth The annual Gross Domestic Product (GDP) growth rate is a major indicator of economic growth. The US economy is the largest in the world, followed by China and Japan. The GDP growth rate of the US was documented as 1.6% in the third quarter of 2011 (tradingeconomics.com). The GDP growth rate of China is far higher, at 9.1%. The GDP growth rates of other major economies of the world, such as India, Germany, Canada, France, Australia, UK and Japan were 7.7%, 2.7%, 2.2%, 1.6%, 1.1%, 0.5% and -1%, respectively, in the third quarter of 2011. As is evident, China has the highest GDP growth rate and India is not far behind. The US GDP growth rate is despairingly low, falling from 3.10 to 1.6%. Therefore, in terms of economic growth, the economy of the US is seemingly in decline. As for the prediction that the Chinese economy will soon become the world’