For the last 60 years, the United States has been the undisputed world economic leader. But many will now acknowledge that this status is shifting to China as their economy thrives and ours seems to be stumbling mightily. This is a very different position for the US to be in and leaves many people wondering what’s next.
We have a choice — we can sit by and watch this transition, or we can get out heads out of the sand and really see what’s going on. Yes, we are no longer the leader in the current economy — we make nothing, we import everything. Our trade deficits and debt spending have resulted in a huge recession. Everyone keeps hoping we can get the consumer economy going again and pull ourselves out of this mess. But what if that isn’t the solution at all?
Time to lead and not stay stagnant.
While our consumer-driven economy ramped up to unprecedented levels over the last 60 years, the continued growth on which its success depends is now in serious question. The consumer economy was fueled on cheap oil and those days are numbered. Add to this resource depletion—water, air, land, minerals, etc., as well as the environmental damage that has resulted and the belief that we can continue a consumer economy for another 50 years borders on irrational (perhaps irrational exuberance?).
Yet, here we are, sitting on hope that somehow all our data is wrong and we can spend our way into jump-starting the economy again and take back our role as world economic leader. But that’s a failed policy—and even China will be forced to deal with these realities within the next ten years.
This article appears in May 5-11, 2010.