End Of Empire (II)

Economists are in transition from the end-of-the-world pessimism that they express at the bottom of every recession to the all-is-well optimism they evince when recovery begins. We will soon be treated to non-stop praise of the American economy’s strength and adaptability. Few experts will be inclined to state the obvious: that America’s economic strength has been declining since the decade began; that we are living far, far beyond our means by mortgaging our children’s future; and that 5% of the world’s population (us) isn’t likely to go on sustaining half of global military spending while generating only a quarter of global output.

Perhaps the most worrisome sign of our secular (as opposed to cyclical) decay is the fact that, despite the Bush Administration’s tax cuts and budget deficits, we haven’t managed to generate a respectable rate of growth since the new millennium began. The CIA says in its World Factbook that the median income of American families hasn’t budged since the nation’s bicentennial year, and this decade looks likely to be the worst since World War Two for private-sector job growth. Rebecca Christie of Bloomberg Business News reported yesterday that the federal deficit in July was a record $180 billion, meaning that the government went a billion dollars further into debt every four hours. It would be nice to believe that this will all change with economic recovery, but don’t bet on it.