IS THE AMERICAN EMPIRE IN DECLINE?

Last night the rating agency, Standard&Poor’s down-graded the U.S. credit rating from AAA to AAplus.  This is the first such down-grade in almost a century.  And the agency says there could be another down-grade within the next two years.

Years from now will we look back on this historic event and say it was the turning point in America’s fortunes.  That the country is now on an inexorable path to steady decline.

Donald Trump blames the Obama administration and says the United States is now the “laughing stock” of the world.

S.&P”s says  that “the brinkmanship of recent months highlights what we see as America’s governance and p olicy making becoming less stable, less effective and less predictable.”

Canada now has a higher credit rating than the United States does.  And China is fast over-taking the United States in both economic and military might.

Can anything be done right away to reverse this trend? The Obama administration wants to raise taxes on the rich.  But that is still a drop in the bucket of debt.

The Republicans, and especially the Tea Party, want to cut benefits like Social Security, Medicare and Medicaid.  But few Americans are willing (or indeed able)  to absorb cuts in these programs.

Is the American Empire in decline?

What do you think?

12 Comments »

  1. 1
    Neil McKenty Says:

    After posting my blog today, I received this week’s copy of The Tablet of London with a leader editorial entitiled “The End of Empire.”

    “The days when American could rearrange the world are over.”

    “Empires always seen to contain the seeds of their own destruction. Eventually, they all come to an end.”

  2. 2
    Barbara Says:

    Too soon to tell, but auspicious nonetheless. I am rooting for the decline, personally. Time for someone else to take over the role of world go-to power. It will be a painful adjustment for the USAmerican psyche, though. Britain has not recovered from its decline completely. The back-benchers of the world are actually in a more comfortable, less stressful position.

  3. 3
    Trev Says:

    The rising power China has just told America to decrease its debt by spending less on the military and less on welfare. And reports in the media suggest they are blithely hacking institutions in the west, whilst flouting copyright rules. Dark days ahead.

  4. 4
    Neil McKenty Says:

    Barbara,

    I am rootin for the decline, personally. Timre for someon else to take over ….”

    But who?

  5. 5
    Tony Kondaks Says:

    S&P was very clear to say that the $2.1 trillion cuts over ten years was not nearly enough. Spendthrift Barry and both the Republicans and Democrats are to blame…not the Tea Party, though. They are the only ones willing to say and do the tough things to save our collective asses…

  6. 6
    Barbara Says:

    One or more of the current back-benchers, Neil. I did not use the term “policeman”, but go-to country of the world. I am dreaming of a really new world order in which competence and justice and peace have more significance than military clout. China is right. The USA should spend less on military.

  7. 7
    jim Says:

    On August the 2nd I wrote on Neil’s blog these excerpts:-
    “Througout all of earthly history the downfall of the Empires has always been greed. The U.S. is on that track. Would anyone ever believe they would one day hear that the beginning of the downfall would start with the downgrading of the U.S.credit rating by the U.S. credit rating agencies, the very same agencies, which in collusion with the banks, caused the present financial crises and the loss of homes by millions of owners. Because there will be a lot of confusion about the U.S. Dollar………….the core basis for financial dealings will begin with the change over to the Euro. Thus begins the demise of the Empire.”
    Years from now the question will be asked “what caused the downfall? The answer will be that the politicians wanted to be re-elected so they enacted laws which made the rich richer and the poor poorer. Yes Virginia, there is a Santa Clause, he gave all the presents to the rich people.”
    P.S. Don’t worry about the military might of China, they are stay-at-homes

  8. 8

    jim:

    Greed had nothing to do with it. Indeed, just the opposite.

    A cursory reading of the budgets of the United States over the past 20 years (the time period in which well over 90% of the debt was accumulated) will show you that the majority of the spending done by the federal government was for social and entitlement programs. This is not greed but a desire to provide to those less fortunate.

  9. 9

    Let me add, jim, that you were right on with an earlier assessment you made about the credit rating agencies (I believe it was you who made the comment in another thread) in which you observed that they gave highest ratings to companies that were largely responsible for the ’08 financial crisis. I can’t recall whether you mentioned AIG but it was this company alone which, through its wanton sale of credit default swaps, triggered that crisis. And the credit ratings agencies right up until the collapse gave AIG a stellar rating.

    Wow. Can you imagine; AIG had sold swaps totalling many trillions in liabilities and they only had about a $250 billion net worth.

    The rating agencies — overseen by both the SEC and federal regulation — had a monopoly on the rating system. Indeed, it wasn’t the lack of regulation but the imposition of regulation that caused the problem. Had there been a free market in rating agencies I believe we would have had a better chance to have identified the risk AIG’s irresponsibility presented to us. But when the government requires only a select few (their select few) to be the agencies I suggest to you there isn’t much incentive to do a good job.

    Throw in the requirements and laws that banks had to do business with poor people unable to service their own mortgages and you had a recipe for disaster.

    Lack of free markets was the problem, not a lack of regulations.

  10. 10
    jim Says:

    Tony:- The greed I was really pointing to was the greed of most politicians who will sell their souls to be re-elected, at the expense of their country. The people I’m really afraid of are the incompetent judges who have made many a decision based on their getting re-elected. Also what kind of insanity is it that banks would throw millions of people out of their homes and then have to spend a pile for extra insurance and security when it would have been cheaper to allow the residents to stay. Don’t get me started.

  11. 11
    Tony Kondaks Says:

    Jim: well, just so you understand: the cause of the Empire’s downfall was not, as you wrote above, laws that made the rich richer and the poor poorer but, rather, laws that made the rich poorer and the poor richer.

  12. 12
    jim Says:

    Tony:- I want to be rich so that I can become poorer too. Tax the hell out of me until I’m still richer than the poorest. But let not my financial decline happen too quickly. Let me take advantage of those tax breaks that the rich get first. Then I’ll help increase employment by buying a second home, a second car, and a longer holiday in Florida, amongst other things.


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