America: In Decline

 

There can be little doubt that the United States is in decline. We are losing ground to other countries by all measures, and it is happening faster than anyone might have imagined. In my last post, I spoke about the three pillars of power: military, economic, and infrastructure. Let's examine our status in each of these areas.

Military

We still have major dominance in this area. China is working hard to catch up, and they are deploying considerable resources to develop technological advances, but the time it takes to build the type of military power we have is making it hard for them to catch up quickly. Nonetheless, they are getting to the point where they will likely be able to hold their own in their region.

Trump is a peacenik. There has already been some talk of streamlining the military. His friends in the military-industrial complex may slow him down or even stop him, but unlike Reagan, who saw military power as a way to retain global dominance, Trump thinks he can do it through trade (we'll get to that).

This will be the last pillar of power to go due to our huge existing advantage.

Economic

Our economy is still the largest globally, but the gap is closing with China and India. They have many more people than we do, and they are leveraging their labor advantages to bring production to their countries. Furthermore, production requires natural resources. Other countries have several advantages in this area. First, China doesn't care about the governing style of leaders they negotiate with for resources. 

China is happy to offer loans to build infrastructure in exchange for extraction rights. When autocratic leaders pocket the money rather than create a functional economy that can repay the loans, China is happy to take the resources from them in exchange for loan repayment. This locks China into long-term extraction arrangements that allow it to pay with old money. The U.S. is less inclined to use such tactics, giving China a strategic advantage that is almost impossible to beat.

The U.S. under Trump encourages mining in our backyard. Even if he can overcome all of the environmental regulations that have been put in place, local resistance to destroying the landscape will likely prevail. Without resources, the plan to disadvantage countries from selling their goods here in order to force us to produce domestically is doomed to fail.

Instead, two things have already started to happen. First, producing countries are strengthening their trade relations with other trading partners and building new ones. These relationships will make them less reliant on U.S. markets, making them less likely to absorb tariffs, instead passing them on to American consumers. In so doing, they will inflate the dollar, making it less suitable as the global currency. It's just a matter of time before the dollar loses its supremacy. When that happens, we will no longer be able to print money with reckless abandon (as Trump's Big Beautiful Bill, in its current form, would do to the tune of $2.6B over the next 10 years).

Finally, immigration plays a big part in our economic decline. Much of our innovation comes from Chinese and Indian nationals who prefer to live in the U.S. As Trump makes it increasingly uncomfortable for immigrants and as their home countries get better infrastructure (more on this, too), these incredible minds will innovate elsewhere. Also, our birthrate continues to plummet, and no social engineering efforts seem likely to change that (short of forced birthing, which is underway in some states). With fewer people and less innovation, our economy will naturally shrink.

Infrastructure

While we're on the topic of immigration, who do you think builds our houses, roads, and other critical infrastructure? Many of them are immigrants. Without immigrant labor, the pace of infrastructure development will slow. Automation is and will continue to help with this. Still, Americans show a general disdain for dirty jobs, and Gen Z is looking to be the worst of the bunch for their lack of motivation to go outside in the elements and do physical labor. Just ask anyone in the building trades. They will tell you that they can't find young people to take on the apprenticeships required to learn the necessary skills. Furthermore, these may be some of the hardest jobs to automate.

The United States was the first country to have modern infrastructure--indoor plumbing and sewer systems, electrification, and interstate road systems. Because of this, our infrastructure is now the oldest. Countries playing catch-up are installing more modern systems, and because they're newer, they have yet to need maintenance. We are in the midst of replacing much of the infrastructure, and because it must connect with the old infrastructure, it is impractical to make wholesale innovations. This means countries like China and India will increasingly have cleaner, more efficient infrastructure.

As this shift happens, more people will prefer to live in those countries and the United States will become increasingly irrelevant.

Is There Hope?

It is possible that our government could magically become populated with great leaders with the vision to move us off our current trajectory. However, it would require extraordinary effort and sacrifice, something modern Americans have shown little stomach for. It is far more likely that we will get more rhetoric and blame as we circle the drain.