Is America in Decline? The Economist’s View
By Shlomo Maital
U.S. % of global total for various indicators…
Is America in decline?
An excellent graphic by The Economist (daily chart) lists a variety of economic, financial and technological indicators for the U.S. as a share of the global total. America leads firmly in venture capital investments, and the U.S. dollar is still 60 per cent of total world forex reserves. In technology, the U.S. leads firmly only in “social media’ (which does not generate jobs, only wealth for a handful) and “cloud hosting” (similar to social media). Most of the indicators in which America dominates are financial in nature. US dollar share of bonds, R&D spending, FDI stock, debt, etc.
So here we have it. The U.S. is still the financial leader of the world, but not the technology or economic leader. There is a serious mismatch.
So the question arises: Can the U.S. remain the center of financial stability of the world? Or will its flagging economy weaken the dollar and the whole world system? Are we due for another crisis?
In history, no power has remained dominant in finance without remaining dominant in economics (note the decline of the British empire and its industrial power, and the decline of the pound sterling).