US economic decline and impact on force projection capabilities

DumLoco

DumLoco

New Member
FreeAsia2000 said:
Not really.

In order to have an economy you need access to resources.

How long do you think the allies would have been able to fight WW1 or WW2 without oil ?
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Well, i was implicitly counting on such resources like oil wen i said all that. My point was that not everything is money and financial BS when it comes to a country's influence and power. A financial crash can be easily left behind if the country has a strong industrial/natural resource base. The USA can never fall to become a lesser country if their economy collapses, it's just too big for that to happen. It would be a major crisis, but they'll just turn out ok soon.
 
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Nethappy

NO WAR PLS
VIP Professional
Hi guy ... am bak.. been real buzy with work lately.

As the single biggest market in the world opened up and intergated into the world market economic, everyone is rushing in for a piece of it. Then with iy nice combination of it less regulated business environment and fixed rate currency to o created a very attractive businesses prospect and with it so call morally neutral and noninterference aproach to it foregin policy which many countries are increasingly more comfortable with, even in Europe then the so call hogwash Washington's preaching of Democray and liberalizing some would said. China has become the engine of global growth and the global economy has configured itself around it.

Yes the fixed rate reminbi has a generating a undervaluation against all curriencies that now averages 20 to 40 percent and China has a trade surplus with almost every country in the world. But it the Western world who almost always take the largest cut of the profit and many country economic benifit from it. Neverthe less many goverment in the world are using this trade surplus and undervaluated currency to take focus of it people of it own policy error and it own problem.

This is not America-bashing so please dun be offended.
US economic decline is not because of China cheap Chinese labour or record high trade deficit, though it may have some effect. But because of it federal budget deficit and proconsumption tax policies which consequenced which negative personal saving rate. The Federal budget deficit is cos by it negative national saving rate, and execced spending (One very nice example is Iraq). A shortfall of domestic saving, countries can curtail economic growth or borrow from the rest of the world. So America must run a massice current-account deficit to attract the foreign capital it needs to fund economic growth and now closing in on $800B per or about $3B er business day, up for $2B 2 years ago. America really need to fixed up it Monetary policy, fight less war, start saving and stop blaming people for it problem. America may face period of controlled restrain on economic growth, but it much better then the gradual collapse of it economic cos no country can borrow for ever. For the time been let Chinese keep there currency undervaluated, and the Sino-US high trade deficit. Cos it going to do more good then bad.

A 27.5% tariff or a major revaluation of renminbi may slow the Chinese economic growth but it can never stop it. But the America trade deficit wouldn't shrink it would surely lower American consumers purchasing power and gradually increasing US foregin debt. As they have to import higher-cost chinese good and/or foerign producters which most likily dun enjoy China's low-cost and pricing advantages.
 
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IDonT

Senior Member
VIP Professional
US economic decline!!!
Show me. Last time I check, the US economy is growing.
GDP is the total amount of goods and services produced in a country per year.
GDP = Consumption + Investment + Government Spending + Net Exports
With:
House hold Income = Consumption + Savings + Taxes
Domestic Investment = Savings + Foreign Direct Investment
Government = Taxes + Savings + Foreign Investment

The US economy has access to a lot of natural resources, skilled labor force, and more importantly labor mobility. In other words, it is very flexible. Right now, its transition from a manufacturing based economy to a service oriented economy is something the EU can just dream of. The US govt. plays minimal roles and planning is done by the individual companies.

In the early 1970s, the US just lost Vietnam, its economy had high unemployment, high inflation, price of oil was a lot higher than it is today, and the Bretton Woods System has just collapsed. Yet despite all this, the US economy was flexible enough to recover and still be number one my at least 6-7 times magnitude than the next largest economy

For those of you who don't know the Bretton Woods System
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Baibar of Jalat

Baibar of Jalat

Junior Member
Post war debts, an pacifist populace, a growing inability to deal with Fascism... all these were heavy upon British policy makers.QUOTE]

Wiggen, your point is very dangerous for American pre-eminence, if theres a backlash towards the Military- industrial complex over the military taking large percentage of tax dollars thus leaving other areas to be neglitated then the US is in trouble. Mainly due to the US government subsidies its industries heavily, sorry IDONT it is true, one hundred billion on weapons precurment yearly, tens of billions on R&D, if there was a small defence budget in the US, places such as Silcon valley would not exist plus there is a number of companies, directly and indirectly supported by the military, which i do not need to state because anyone could guess.

The fact is US industry is highly subsidenced compared to Germany or Japan who have small armies, due to historic reasons thus have concentrated on the civilian market whereas in America it is both mil and civ sectors.
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DumLoco

DumLoco

New Member
IDonT said:
Yet despite all this, the US economy was flexible enough to recover and still be number one my at least 6-7 times magnitude than the next largest economy
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In nominal ratings, the GDP of the US is somewhere near 12 trillion dollars, followed by Japan standing at 4.5 trillion. So there is not a difference of 6 to 1, is more like 2.5 to 1.

Taking in account the purchasing power parity (wich i consider far more reality reflecting) the US stands again with 12 trillion, followed by PRC with 8 trillion. Here the difference isn't even of 2 to 1.
 
E

Ender Wiggin

Junior Member
I think he meant in the early 90's late 80's though im unsure.

Here's the thing though the SU collapsed mainly because it simply could not support a 5 Million man army in PEACETIME and the political repercussions of budget cuts and abandoning the Warsaw pact "outer empire" excelerated the breaking away of the Former Soviet Republics eventually destabilizing the Soviet Union.

The USA is maintaining an army of some 1.5 million personel spending some 450 Billion Dollars a year on it and is planning on purchasing some 1000 F-35's and about 12 of the newest Nuclear Attack Submarines I think the Sea Wolf class.

What some of you are failing to take into account is that when the US goes under the immediate solution to their problems is massive cuts to the military I suspect a 60-85% reduction across the board. So no 1000 F-35's, no new submarines, I suspect all ships being built would be stopped temparilly and then scrapped afterwards. And I suspect as well that nearly a half to 2/3's of the active military would be demobilized with reduced pensions, and the majority of US bases around the world withdrawn.

While the US of A would recover from economic collapse within 5-10 years is irrevelvent that its armed forces would be severly weakened, if you cannot pay your troops how to you expect them to fight for you?

The short term consequences of collapse would be enough for the USA to be no longer relevent to a majority of world power decisisions maybe even be enough to allow a forced settlement of the Taiwan issue without American interfearance.
 
I

IDonT

Senior Member
VIP Professional
DumLoco said:
In nominal ratings, the GDP of the US is somewhere near 12 trillion dollars, followed by Japan standing at 4.5 trillion. So there is not a difference of 6 to 1, is more like 2.5 to 1.

Taking in account the purchasing power parity (wich i consider far more reality reflecting) the US stands again with 12 trillion, followed by PRC with 8 trillion. Here the difference isn't even of 2 to 1.
Click to expand...

Purchasing Power Parity is useful only in measuring the STANDARD OF LIVING of one country vs another. It is not even as accurate as on real GDP because non traded goods are not counted. Likewise, PPP figures can also be easily manipulated with a specific basket of goods that are selected.

GDP is a measure of ECONOMIC OUTPUT, not standard of living of its citizens. The ability of PPP-adjusted GDP to describe the strength of an economy vs. another is limited because it doesn't account things that are not captured by PPP such as
Infrastructure
Barriers to trade; e.g., Tariffs, sanctions and duties
Transportation costs
The difference in the PPP exchange rate and the nominal exchange rate.

What some of you are failing to take into account is that when the US goes under the immediate solution to their problems is massive cuts to the military I suspect a 60-85% reduction across the board. So no 1000 F-35's, no new submarines, I suspect all ships being built would be stopped temparilly and then scrapped afterwards. And I suspect as well that nearly a half to 2/3's of the active military would be demobilized with reduced pensions, and the majority of US bases around the world withdrawn
Click to expand...

The US economy make up such a big portion of the entire global economy that an economic collapse will have global consequences. You won't believe me? In the 1930's the US inacted the Smooth-Hawley Tarriff that puts about 60-70 % tarrif on imported goods. This tarriff collapsed the entire international trade system and made the Great depression worst.

Think about it, the US economy is the most important economy to most of the world's nations. Even China needs American consumers to buy its goods. Without China's trade surplus with the US, its trade deficit with the rest of the world will be alot worst. Should the US economy, the worlds largest consumer market, financial market, industrial market, go down, its taking the whole world economy with it. At that time, buying weapons will be the least of everyone's worries.

Wiggen, your point is very dangerous for American pre-eminence, if theres a backlash towards the Military- industrial complex over the military taking large percentage of tax dollars thus leaving other areas to be neglitated then the US is in trouble. Mainly due to the US government subsidies its industries heavily, sorry IDONT it is true, one hundred billion on weapons precurment yearly, tens of billions on R&D, if there was a small defence budget in the US, places such as Silcon valley would not exist plus there is a number of companies, directly and indirectly supported by the military, which i do not need to state because anyone could guess.

The fact is US industry is highly subsidenced compared to Germany or Japan who have small armies, due to historic reasons thus have concentrated on the civilian market whereas in America it is both mil and civ sectors.
Click to expand...

You are getting your logic wrong. Unlike other developed countries, most U.S. civilian R&D are made by Independent Companies and Universities. The US strong support for intellectual property has made it attractive destination to Pharmaceutical, technological, and Industrial companies to relocate their R&D outfit here. Result, the US holds the majority share of the Intellectual economy. This also have an added bonus of having many of the "Smart" individuals immigrating here and becoming Americans thereby sthrengthning the US labor force.

The US govt. R&D is heavily geared towards military technology. However, this R&D has a trickle down effect on the economy as a whole. Examples of this is the Internet, which was developed by DARPA as a way for NORAD computers to talk to each other quickly in case of a nuke war, and GPS systems. There are more
 
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MIGleader

MIGleader

Banned Idiot
IDonT said:
US economic decline!!!
Show me. Last time I check, the US economy is growing.
GDP is the total amount of goods and services produced in a country per year.
GDP = Consumption + Investment + Government Spending + Net Exports
With:
House hold Income = Consumption + Savings + Taxes
Domestic Investment = Savings + Foreign Direct Investment
Government = Taxes + Savings + Foreign Investment

The US economy has access to a lot of natural resources, skilled labor force, and more importantly labor mobility. In other words, it is very flexible. Right now, its transition from a manufacturing based economy to a service oriented economy is something the EU can just dream of. The US govt. plays minimal roles and planning is done by the individual companies.

In the early 1970s, the US just lost Vietnam, its economy had high unemployment, high inflation, price of oil was a lot higher than it is today, and the Bretton Woods System has just collapsed. Yet despite all this, the US economy was flexible enough to recover and still be number one my at least 6-7 times magnitude than the next largest economy

For those of you who don't know the Bretton Woods System
Please, Log in or Register to view URLs content!
Click to expand...

Name a country that has a National debt bigger than Americas.

Cant find one? Thought so. So despite its some 12 trillion$GDP, it owns some 8-9 Trillion$ to other countries and/or citizens
 
I

IDonT

Senior Member
VIP Professional
MIGleader said:
Name a country that has a National debt bigger than Americas.

Cant find one? Thought so. So despite its some 12 trillion$GDP, it owns some 8-9 Trillion$ to other countries and/or citizens
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You are correct that the US is the biggest debtor nation. However, if I have a million dollars and is 500 thousand in debt and you have 100,000 and have 80,000 in debt, who is better off.

Most of our debt is from ourselves.
Do you know what the term risk-free rate means? It means that borrowing this money you get a low rate because you are 100 percent assured you get your money back. It says alot about the US economy when US T-Bills rate are considered AROUND THE WORLD as RISK-FREE rate. Think about it. What is the ratings on China's treasure bills? I bet you they are higher.
 
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SampanViking

SampanViking

The Capitalist
Staff member
Super Moderator
VIP Professional
Registered Member
Lets keep it cool guys.

The global economy is like an engine, it needs all its component parts running properly in order to function. Take my advice, stop thinking countries, start thinking sectors and Corporations and you will have a far better mental picture as to how these things interact.
 
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