Critique

A Smaller Slice of a Shrinking Pie

Dixie:  Whether at the individual level or the national level, purchasing power is a function of savings, income growth, and debt.   Serious problems begin to occur when debt begins to accrue faster than growth occurs.  This is happening to the U.S.  There are two ways to stop this.  Stop borrowing and start spending more wisely, or grow faster.  With globalization causing more international competition, the growing faster may prove to be very challenging.  A some point there's going to have to be a serious re-evaluation of our national spending habits.

Caferrell: There's no doubt that America's role as the world's sole superpower is diminishing.  And you're totally right about the comparison to previous empires... we're being over-extended in the same way.  If our enemies win this "war on terror", it'll be by bankrupting us.  

You've probably heard that with only about 5% of the world's population we use about 25% of the planets natural resources.  America can't sustain this, even by going to war for those resources.  Unfortunately we only have one earth, so there's going to be more and more competition for those resources.  This means that America is going to be receiving a smaller slice of a shrinking pie (declining fisheries, forestry, petroleum, etc.).  

I don't think it's clear though how abrupt or how far the drop is going to be though.  If the U.S. dollar drops significantly at some point the balance of trade should reach equilibrium.  The dollar will probably keep declining at least at it's current rate.  This in conjunction with a shrinking oil supply is going to require some lifestyle changes from the average American.  Hopefully we'll adjust by becoming a more self-reliant economy with a more sustainable use of our resources.  If not I can definitely imagine a more catastrophic outcome if we stay on this course and just deny what's happening.