American Hegemony

[Enforcer Talen]

Lets assume that the secret plots of men hold, and the U.S. remains the dominant power for the next 25 years.

Is American Hegemony good for America, ie cost of maitenance and so forth?
Is the hegemony good for the rest of the world?

[K. A. Pital]

1) Yes.
2) No.
It's quite obvious.

[Coyote]

Better to ask if a multipolar world is better. The most likely front runner, of course, is China, but India has potential and motivation. Would a world co-run by America and China be good? Would their competition for dwindling resources lead to global chaos and war or would the smaller countries be able to effectively play them off against one another?

Include in there runners-up India, Russia, and Europe. Europe could, as a united entity, present a serious counterbalance to America in tech and economy, but a lot of things would have to change before the EU could even stand in the shadow of US military power. Russia is too hampered by corruption and inefficiecy to pose a challenge, even though both will & potential is there. Same with India.

Third-tier powers can challenge America in limited, one-issue areas such as Brazil and ethanol, but they're not even in the same reality as the US in other endeavors.

Start with asking if a unipolar world is good in general, then go out from there, and ask if a bipolar world (US/PRC), tripolar (US/PRC/EU), or multipolar (US + alphabet soup) world really is best.

[Alferd Packer]

I think Stas nailed it. It's not as if America got powerful through some sort of unfair or underhanded behavior, stealing the title of top dog from from a country which legitimately deserves it. Of course it's in our best interests to maintain our hegemony. It's hard, I imagine, to stay on top, so you'll do so by any means necessary.

Again, it's not as if any other country has acted or will, in all likelyhood, act differently. Let's say China becomes the superpower after the U.S. in 2050 or thereabouts. Do you honestly think they'll behave any differently? No, they'll throw their clout around as much as possible to get it good for themselves. I think that's just how the game is played on the international level, sucky as it might be.

[K. A. Pital]

From the viewpoint of "national market", being the most powerful and dominating the world is definetely a trait that is good for a country.

From the viewpoint of other nations in the same market, who can be ruined, destroyed, or otherwise harmed, trade- or technology-blocked, it's of course not good.

Basically, there's a competition between nations for resources, capitals, et cetera. Being the top dog is good for you but of course it rightly angers all other competitors.

When you think about nation-states just the same as you think about vicious corporations (which is essentially quite correct, nation-states politicians often exhibit the same level of cold-blooded ignorance and evil, subjugation and willpower to dominate) in a sort of "global marketplace". The strong devour and subjugate the weak to their needs.

There's nothing "sucky" about it, people should understand that the capitalist principles of social darwinism extend to political regimes (which are economic agents) just the same as it extends to companies in the market. A vicious competition without end.

And thus the role of international instututions as an arbiter is important, just as it's important to have several poles of force instead of a supermonopoly. Hegemony of one nation is essentially one nation's supermonopoly. It's good for that nation, but bad for other competitiors.

[RedImperator]

Of course, you can also argue that maintaining national hegemony is ultimately ruinous, if the price is spiraling debt to pay for it and an increasingly militarized domestic culture with correspondingly weakened democratic institutions to maintain support for it at home. We've had a hegemony since 1989, and what damn good has it done the average American citizen so far?

[K. A. Pital]

We've had a hegemony since 1989, and what damn good has it done the average American citizen so far?

Economic dominance. Enormous capital extractions from the Second/Third World, resource hook-up agreements, unfair stuff like WTO discrimination. Does this increase the level of prosperity of the American commoner? Of course it does.

Is economic dominance sustainable long-term? That is a question I believe which will be answered in the nearest future. The process of globalization that is driven by economic residents of the US and US-affiliated economic institutions spawns a spiral of decentralization processes with China becoming more powerful and having leverage over resource supply, with growing demand for fossil fuels, creating the SCO... et cetera.

Sooner or later, someone will concentrate enough capitals to challenge the US economy, in fact, some nation-conglomerates already can. And they do - creating non-dollar resource stock trades, etc.

So, while the current pattern is more cuddly for the American citizen, I doubt that it is sustainable.

[RedImperator]

We've had a hegemony since 1989, and what damn good has it done the average American citizen so far?

<snip>
So, while the current pattern is more cuddly for the American citizen, I doubt that it is sustainable.

Well that's the kick in the ass, isn't it? If a few generations get to live to absurd excess at the cost of all the following generations paying for it, in the long run hegemony wasn't worth it. You could argue that "cuddliness" wasn't good for the generations that had it, either. Dirt cheap gas, dirt cheap food, dirt cheap minerals got us suburban alienation, an obesity epidemic, and mountains of glittery crap to fill our ugly houses in the middle of nowhere.

Americans in the last 60 or so years could have enjoyed a lifestyle that was the envy of virtually everyone who ever lived prior to 1950 at a quarter of the price they paid, maybe less. So again, I don't really see what hegemony bought us that a peaceful multipolar world couldn't have. Or even a tense, but stable one, as long as it didn't tip over into global war the way the pre-WWI European order did (and nuclear weapons go a long way towards making global war unpalatable to even the most reckless nation).

[Starglider]

American dollars being the primary reserve and trading currency has allowed the US to run massive deficits (federal and trade), partly supporting US military and social security spending. The artificially high value of the dollar has allowed the US to buy huge amounts of finished goods (particularly consumer goods) and resources (mainly oil) from other nations. In the short term, this supports the luxurious lifestyle. But it is a big driver for outsouring, leading to loss of industrial and now even R&D capability, and ultimately declining skills and education standards as an ever larger fraction of the available jobs become service, sales and maintenance jobs. There are so many potential things that could go wrong with the US economy now, that even though the economy as a whole is very robust, a chain reaction leading to a great depression is quite possible.

[Spyder]

1) Yes.
2) No.
It's quite obvious.

1) Not necessarily, in fact if the wealth distribution model doesn't change it could make it even more difficult for poor Americans to break through socio-economic class barriers.

[Coyote]

From the viewpoint of "national market", being the most powerful and dominating the world is definetely a trait that is good for a country.

I don't know about that, a powerful hegemonic economy also makes your exports more expensive and less attractive to outside buyers.

I dislike hegemony, really. I thought it would be the best thing for us but in truth it's a pain in the ass and not worth the trouble.

[Admiral Valdemar]

American dollars being the primary reserve and trading currency has allowed the US to run massive deficits (federal and trade), partly supporting US military and social security spending. The artificially high value of the dollar has allowed the US to buy huge amounts of finished goods (particularly consumer goods) and resources (mainly oil) from other nations. In the short term, this supports the luxurious lifestyle. But it is a big driver for outsouring, leading to loss of industrial and now even R&D capability, and ultimately declining skills and education standards as an ever larger fraction of the available jobs become service, sales and maintenance jobs. There are so many potential things that could go wrong with the US economy now, that even though the economy as a whole is very robust, a chain reaction leading to a great depression is quite possible.

The massive inflation of the the US' currency along with many ME nations ready to follow China and Kuwait in unpegging the dollar as their chief trade currency add to the already growing mountain of housing boom, Peak Oil and struggling industry. Oh yeah, the War of Terror doesn't help either, invading Iraq just after they ditch the petrodollar and sell oil in euros is mighty fishy.

The US may eke out an existence using brute force, but short of a miracle, the fiat currency they have now is going down the shitter sooner or later. Thank the euro, yuan and yen for that.

[Beowulf]

Of course it's a fiat currency. Are there any major currencies left which aren't?

[Admiral Valdemar]

Of course it's a fiat currency. Are there any major currencies left which aren't?

Nope. My point is, it wasn't that way until 1971. Now it is. And history shows all fiat currencies die, one way or another. The US has nothing backing it since the gold standard was revoked by Nixon to save US gold deposits. Once one nation jumps ship seeing the US cashing cheques it literally can't cash, then they all go. That they aren't right now is because the crash the US would make would produce shockwaves that may bring their economies down with them. This is why the euro, for example, needs to be installed as the next major currency, or preferably a basket of currencies to maintain stability. Gold and silver have also shot up in price as of late thanks to future investors seeing a market for it rather than T-bills.

[brianeyci]

The average American will not be able to understand why it happens, when it happens. They will ask, how come the United States owes foreign governments so much money, and how was that allowed to happen. They'll be at best finger pointing and at worst fearmongering and racism. A whole generation will grow up thinking that it was the fault of foreign governments that American lifestyle deteriorated. And ultimately, the American consumer will demand the luxurious lifestyle continue, even if he can't pay for it. That means an attempted military solution, or maybe slave labor coming in from Mexico. None of it will work, but it won't stop the average greedy ignorant dicks from demanding it from their governments, unless the decrease in lifestyle is so gradual that it just gets accepted over time.

[Admiral Valdemar]

Consider this. Every newborn in the USA owes near $200k to the rest of the world from the get go. No one has savings in the United States, because practically everyone has to shove what they earn or put into bank accounts straight into a fund that should be paying off debt. That the deficit is growing whilst the dollar depreciates isn't making things rosier. Nations also default, just as individuals do. The US is not immune to economics (although I think the gov't believes they are, since this week they formed a bill making it illegal for OPEC to sell oil at extortionate prices. I wish I was making this up).

[brianeyci]

Everybody who is not an economist will ask this question (and I think a valid one):

"So what if the US doesn't pay them back?"

After all, if I don't pay back my student loans, they're not going to cut me up and kill me. If the US doesn't pay back old debt, or if it's even incapable of paying off interest on old debt, what is the worst that could happen? It seems like the lender's to lose, unless the lender can muscle money out of the borrower. And nobody can push around the US military.

What is it, just oil? The flow of useless consumer goods halting?

[Spyder]

Everybody who is not an economist will ask this question (and I think a valid one):

"So what if the US doesn't pay them back?"

After all, if I don't pay back my student loans, they're not going to cut me up and kill me. If the US doesn't pay back old debt, or if it's even incapable of paying off interest on old debt, what is the worst that could happen? It seems like the lender's to lose, unless the lender can muscle money out of the borrower. And nobody can push around the US military.

What is it, just oil? The flow of useless consumer goods halting?

Is it the actual US government itself signed on to the debt or is it spread across various agencies and institutions?

[Fingolfin_Noldor]

How does debt thing work actually? I am under the impression that Treasury bonds are essentially "selling away US debt" and that people are financing the debt.

So what really happens?

[Darth Raptor]

The same thing that happens if individuals don't pay back their personal debt: People stop loaning them money. No country on the planet is going to loan money to the United States again if they know we're not good for it.

[Admiral Valdemar]

Everybody who is not an economist will ask this question (and I think a valid one):

"So what if the US doesn't pay them back?"

After all, if I don't pay back my student loans, they're not going to cut me up and kill me. If the US doesn't pay back old debt, or if it's even incapable of paying off interest on old debt, what is the worst that could happen? It seems like the lender's to lose, unless the lender can muscle money out of the borrower. And nobody can push around the US military.

What is it, just oil? The flow of useless consumer goods halting?

Then the US just ran into a huge trade problem. All those nice consumer goods you get from China? They're going to the EU, who can pay for them. That tasty Saudi light sweet crude? Australia and Japan will take some off your hands. Sure, the US going down economically would cause severe trauma within the global stock markets, but not if everyone is already prepared to trade without the US as a main backer. The US has nothing the rest of the world can't already get some other way. You don't export oil, you import it. You don't manufacture squat, you get others to do that. You produce services, and people do not eat abstract concepts like banking nor do iPods or Windows and Hummers make civilisation. They are all luxuries no one needs or can easily replicate.

So while it will hurt the rest of the world, it will destroy the US. In fact, it already is. Your inflation is collosal, ask yourself why the M3 data is no longer computed in the gov't economy papers now (hey, inflation is fine, so long as you exclude food and energy as they do now. Because no one needs food or energy, *I'm a smarmy asshole*?). If the economy is booming, why are food prices going up so much you can see it hurt you every year, why are gas prices the highest in history? The Big 3 US motor companies crashing and burning is linked to this, but also mainly down to the fact that they make shit cars (even saying that as an owner of a Ford that serves me well). The housing market is foreclosing at such an epic rate, 62 realty companies have died in the past year or so alone. This is taking place elsewhere such as the UK and Spain too, though the US is doing it bigger and better.

The US constantly snipes at China for not playing fair on the business stage, when really, the reason is they're not playing the game the US wants them to. Someone has a massive trade surplus and they're still buying dollars, but for how long? The US military is no threat anymore as Iraq is helping prove (unless you nuke someone, which you're not going to do). The US economy, despite record high numbers on the Dow, buys even less than it did a decade ago; I can get two of your dollars for one of my sterling. Chindia are rapidly beating the crap out of everyone else for well educated workers to boost their industrial and economic might. It's getting to the stage where China is competing for the last great deposits of energy and resources around the world and has plenty of cash to do so. The US, as a nation, has nothing but empty promises. Who do you sell your product to? The guy with a wallet full of crisp new notes, or the guy with an IOU?

You need more and more births to help pay for what you're spending now. It's a nice Catch-22, because if you don't get those extra workers earning a slave's wage, then your economy collapses anyway. If you do, you simply perpetuate the consumer nation that exists today, shifting the burden of debt on to the next generation. And don't think some administration anytime soon will stop passing that buck.

[The Duchess of Zeon]

The Spanish Empire defaulted on its loans something like three times in the 16th century without actually collapsing. Of course, Spain ended up an economic basket case right up into the 1950s, but they managed to find a way to keep funding the wars despite going bankrupt no less than six times in two hundred years. The hardship will come on the level of the individual, not the national level.

[Admiral Valdemar]

That was at a time of no globalisation, of nowhere near the debt nor the equivalent politics. There's also the minor issue of food production, energy production and so forth that were never the burdens back then even with such massively high growth rates. There are too many people alive in the US today and not enough actual liquidity going back into countering the deficit. If the US defaults on such a huge scale, the US will just be ignored for any major investment since there are plenty of other powers to turn to in this modern age. And really, saying it falls to the individual means little. What is the nation if not its people? If the people running the state remain in ivory towers whilst everyone else is left in a total shambles of a society, that's not exactly contrary to my view of economic collapse. It sounds more like Stalinist Russia.

The US losing its standard of living seen as a birth right today would bring mass uprisings. I listen to the whinging over gas prices, the cheapest in the Western world, and wonder what it'd be like if the US had to actually deal with the consequences of its massive wasteful consumption levels. Civil wars were fought over less fundamental things.

[brianeyci]

How about debt forgiveness.

I wonder how the current US debt compares to Germany's war reparations after WWI.

Imagine that, the US resorting to printing money to solve its problems. And don't think it won't happen -- elect morons long enough who don't understand economics or long-term strategic thinking (or worse yet, don't listen to people who do understand such) and it might come down to some President in the next 40 years, down to earth, who doesn't want to give those homo-bortion-pot-and-commie-jizzporium lenders their minimum payments and resorts to printing money. What a sad state of affairs.

[Admiral Valdemar]

Well, see, they are printing money to solve their problems. Why do you think the USD's value has gone to shit? It's more abundant than toilet paper now, only less useful.