American superpowerlessness
The economic and military decline of the U.S. is encouraging its adversaries to challenge U.S. interests
Two disconnected events are headlines this week: the faceless Russian takeover of Crimea that is still playing out and President Obama’s budget, which will likely die in Congress. Yet, these two events are linked since they reflect a new trend: American superpowerlessness.
Some have compared past U.S. economic and political domination to that of the Roman Empire, which dominated the Mediterranean world using economic, engineering and military power. The Roman war machine was brutal in suppressing uprisings, exacting tributes from conquered states to finance a technologically advanced empire that linked its disparate parts by roads. The empire was attacked on all sides by the likes of Huns, Vandals, Parthians and Germanic tribes, which led eventually to a sacked Rome in AD 476, bringing on the Dark Ages with its absence of a superpower and subsequent regional conflicts. Rome’s long decline was itself brought on by a weaker economy and shaky leadership succession resulting in the subdivision of the empire.
The United States has dominated the world both economically and militarily since the Second World War. In 1950, the American share of global GDP was 28%, falling gradually to 19% in 2010 as emerging countries have grown faster. As the Asia-Pacific region and others countries continue to outpace the U.S. over the next 30 years, the decline of the U.S. empire will continue.
Nonetheless, the U.S. has dominated world developments due to its combined economic and military power. With the fall of the Soviet empire over two decades ago, the only challenge to American domination ended. Today, the U.S. accounts for 43% of global military spending.
Yet, the signs of a weakening superpower show. The mortgage crisis of 200809 in the United States came of fiscal and monetary policy buoying excessive domestic consumption that kept exporters like China, Germany and Canada on economic steroids with large trade and saving surpluses. The ensuing financial crisis weakened U.S. finances with government indebtedness approaching levels not seen since the Second World War.
Despite the robust Obama 2014 budget projections of 3% growth and a decline in deficits to 1.6% of GDP by 2024, the Congressional Budget Office and other analysts expect deficits closer to 5% of GDP in a decade. Debt will pile up and inter- est rates will eventually rise well above the depressed rates after 2008, leading to US$635-billion in additional public borrowing charges, more than its current defence budget.
America’s unresolved fiscal problem contributes to its superpowerlessness. After costly wars in Afghanistan and
Crimea is not the first instance of waning U.S. influence
Iraq, the U.S. is less willing to take on new military battles overseas that would be covered by higher taxes or lower social spending. Obama caps the defence budget at US$623-billion in 2015 to be cut by US$39-billion in 2016. Eventually, the defence budget is expected to decline to 2.3% of GDP, one of the lowest levels since 1940.
It is hard to be a superpower while highly indebted with a large trade deficit. The British came out of the First World War with debts that made it impossible to control its British colonies overseas. The decline of the British Empire after 1919, in stark contrast to its domination in the previous century, should be a lesson for any superpower today.
These economic developments help explain weakening American foreign policy. Russia, holding the resource export card over the Ukraine and Europe, can make Crimea a principality, protecting Russian strategic and oil interests in the Black Sea. Because the U.S. is unwilling to send troops to wage war in Crimea, it is difficult to see how Russia can be dislodged.
Sure, Russia might be kicked out of the G8 (which then becomes the G7 again) but this is of little consequence compared with losing economic and military power over its crucial ex-Soviet bloc countries. Sanctions such as freezing assets or trade could evolve but, unlike Iran, Russia can retaliate by freezing assets of major companies like Exxon, Société Générale and Renault or cutting gas supplies to Europe. As Putin noted in his press conference the other day, countries are globally dependent.
Of course, Crimea is not the first instance of waning U.S. influence. After threatening war if Syria crossed the “red line” by introducing chemical warfare, Obama retracted by letting Congress make the decision. An outfoxed Obama was saved by Putin, who increased Russian leverage in the Middle East by pushing Syria to rid itself of chemical weapons. In Crimea as in Syria, the U.S. public does not support American intervention in farflung countries.
Indeed, the U.S., because its explosion of energy production is eliminating its energy dependency, is moving away from the Middle East, letting other powers like Russia and China fill the void. The attempt to negotiate with Iran to turn it toward the West, and with Israelis and Palestinians to avoid war, reflects the desire of the U.S. to limit a military role in the future.
Anticipating that the United States won’t use military strength as an ultimate weapon to control global conflicts, countries are likely to challenge American superpowerlessness. The U.S. could try to influence events with its economic power through sanctions, but this is becoming less effective as its share of GDP declines. Russia won’t be the last to test American resolve.