The United States is, thus already beginning to face the classic problems pf imperial overreach. The burden of maintaining a huge global military presence, witu over 800 American bases dotted around thw worls, has been one of th causes of the US s enormous current account deficit, which in 2006 accountwd for 6.5 percent of US GDP. In future the American economy will find it increasingly difficult to support such military commitment. The United States has ceased to be a major manufacturer or large-scale exporter of manufactured goods, having steadily ceded that position to East Asia. In recent times ot has been persistently been living beyond its means: the government has been spending more than it saves, households have been doing likewise, and since 1982, apart from one year, the country has been buying more from foreigners than it sells to them with a consequent huge current account deficit and growing volume of IOUs. Current account deficits can of course be rectified, but only by reducing growth and accepting a lower level of economic activity. Growing concern on part of foreign institutions about these deficits led to a stready fall in the value of the dollar until 2008, and this could well be resumed at one point, further threatening the dollars role as the worlds reserve currency and American financial power. The credit rating agency Moodys warned in 2008 that the US faced the prospect within a decade of losing its top-notch triple-A credit ratinf, first granted to the US government debt when it was assessed in 1917, unless it took radical action to curb government expenditure. And this was before the financial meltdown in 2008, which, with a huge taxpayer-funded government bail-out of the financial sector, will greatly increase the size of the US national debt. This is not to suggest that, in the short run, the US will be required tp reduce its military expenditure for reasons of financial restraint: indeed, given position that the US military occupies in the national psyche, and the primary emphasis that US forgein policy has traditionally placed on military power, this seems most unlikely. Being an imperial power, however, is a hugely expensive business and, peering into the future, as its relative economic power declines, the United States will no longer be able to sustain the military commitments and military superiority that it presently enjoys.
Posted on: Sat, 05 Jul 2014 01:48:39 +0000
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