Sunday 22 May 2011

Things that are causing the stagnation of America

INTRODUCTION

I spent a few nights researching and writing up my thoughts on the subject of the apparent and ongoing decline of the US. I've been looking at quite a few facts and figures and I've gotta say, its difficult to say how the Americans aren't stuffed. They haven't got a hope in hell of paying off their astronomical national debt in the forseeable future, and meanwhile a whole lot of other things are just going from bad to worse for them.

So - enjoy!

P.S. This is by no means an exhaustive list, and some of the things on it overlap a little, but I'd love to hear any serious critiques of it.

The 11 things I've listed here are in rough order of significance. Also, i expect number 9 with receive the most serious criticism, I'll agree that that one in particular is debatable.

1. Fighting the ‘War on Terror’

Since 2001, 2463 coalition soldiers have died fighting in Afghanistan (1582 of them Americans) and since 2003, 4770 (4452 of them Americans) have died fighting in Iraq. Tens of thousands of US servicemen have also been wounded, many with blown off limbs and other grievous, permanent injuries. Hundreds of contractors and other personnel have also been killed. Total Iraqi fatalities have been estimated to be in the hundreds of thousands and Afghani fatalities in the tens of thousands. The financial cost of the two wars is estimated at about $1.15 trillion as of July 2010, or 1% of the USA’s annual GDP for most of the past decade (or about 4% of its government budget). Take into account future costs like veteran's pensions and medical costs stemming for war injuries, funds required to replace worn out equipment and other costs then the final bill might be as high as $3 trillion dollars.

Currently US fatalities in Iraq are down to a handful a month as most of its military has already withdrawn from the country. In Afghanistan the story is very different, with coalition deaths on course to reach 700-800 for 2011, about the same as 2010, and no end to the escalating conflict in sight. By 2015, when American forces might have largely left the country, several thousand more fatalities and hundreds of billions of dollars will probably have been spent.

As well as the physical and financial costs of fighting the ‘War on Terror’ there has been a serious decline in America’s international standing, both amongst our allies (particularly in Europe) and our enemies (the Muslim world hates us more than ever). When America is looking for future co-operation and favors, European countries and nations like Turkey, China and Russia are now far less likely to trust it and accommodate its demands. At the same time the number of ‘terrorists’ emerging in the Middle East and elsewhere from George Bush’s actions has almost certainly made us far less safe. To call launching and continuing the war a mistake is an understatement, to say that it has exhausted, shaken and divided the nation to the core is not.

2. Spiraling costs of Social Security/Medicare/Medicaid/other welfare programs

The combined costs of social security, Medicare, Medicaid and similar government programs now exceed $1.5 trillion a year. While these programs provide enormous benefits to millions of people (half the elderly population no longer dies in poverty, as it did before social security) their costs are growing far quicker than the nation’s economy as the population ages, grows fatter and finds it increasingly hard to bother finding work in an increasingly bad jobs market.

Many proposals to ‘fix’ social security and these other programs have been proposed such as privatization or raising the retirement age. These efforts have often been stalled for the simple reason that no one wants to hear the logic behind them. Talk about changing social security has long been a ‘third wire’ in American politics where neither party dares to tread. Another way of putting it is that most US politicians understand the reasoning that by trying to change these programs they'll be upsetting so many people that it would greatly shorten their term in office. The passage of 'Obamacare' in 2010 goes a long way to introducing universal healthcare and bringing down healthcare costs, but it still largely leaves in place a badly broken system.

Whatever happens, something substantial will have to be done about these programs or before long they’ll be costing the same amount of money as all the taxpayer revenue the government collects alone, leading to even larger annual deficits in their federal government's budget.

3. The cost and influence of the military-industrial complex

Ever since Eisenhower warned us of this hidden boogeyman of Washington politics in his parting address to the nation in 1960, it has been debated by all sides of politics how influential and destructive it may be. It is fair to say that under the Bush administration it probably grew in power considerably and may have been a major factor in Bush’s decisions to invade Afghanistan and Iraq.

The US is responsible for almost two-fifths of the global arms trade, exporting some $6-8 billion worth of arms annually, and spends far more than that on domestic arms production and more on arms development ($70 billion+) than nearly the rest of the world combined. From 2000-2009 US defense spending increased hugely from $300 to $700 billion a year, with per capita expenditures almost doubling from a historical low of $2000 up to cold war levels of $3500. Including defense related spending in the departments of State, Veterans Affairs, Homeland Security and Energy as well as NASA and Federal Law-enforcement and defense-related payments of debt, the US spends a whopping 19% of its budget on defense.

American troop deployments overseas (excluding 200,000 personnel fighting in Iraq and Afghanistan) include an additional 10,000 in Kuwait, more than 80,000 in Europe (just in case the Russians invade) 60,000 in East Asia and several thousand more in places like Australia, Egypt and Columbia. The deployments in Europe especially defy logic, for all they do is subsidize how much Europe has to spend on defense (with most European countries spending less than half as much on their militaries per capita as the U.S.) while costing the American taxpayer tens of billions of dollars a year. Bringing most of these troops home immediately would do much to alleviate America’s spiraling debt and bring down its military expenditures, for maintaining this expensive ‘empire’ is something America will clearly not be able to do forever.

4. Foreign trade deficits

If you’re an American, looking at a graph of the US trade deficit is truly frightening. The US last had a trade surplus in 1975, but by 1997 it was running a $100 billion deficit that has grown exponentially since as its exports continue to decline in the face of cheaper foreign goods and services (plus the Chinese keeping their currency, the Yuan, deliberately undervalued to drive their exports), causing it to pass $800 billion in 2006. $200 billion of this was with China, $120 billion with Europe and a solid $80 billion with Japan.

Some hope, surprisingly, comes in the form of recessions, which tend to see a large if temporary reduction in the US trade deficit, with it declining to $376 billion in 2009. However once the current global financial crisis is over the deficit is predicted to soar back up and possibly reach more than a trillion dollars annually within the next few years.

A major aspect of the trade deficit includes the trading of oil, with the US currently importing two thirds of its oil at a cost of several hundred billion dollars a year, with that amount subject to sudden price swings (a return of crude oil to US$100 would see that amount rise to almost $500 billion a year). Aside from imposing enormous tariffs on imported goods and other possible policies aimed at stopping the somewhat inevitable trend to globalization, there isn’t much anyone can really do to solve these huge deficits.

5. The overgrown prison-industrial complex

Before 1980 there were less than half a million Americans in prison, but that number has since risen sharply and continues to skyrocket, with it passing 2,500,000 in 2010. According to the U.S. Bureau of Justice Statistics - “in 2008, over 7.3 million people were on probation, in jail or prison, or on parole at year-end — 3.2% of all U.S. adult residents or 1 in every 31 adults,” subsequently the US has the highest rate of incarceration in the world. It is 12 times that of Japan and 8 times that of Europe.

The sudden quadrupling of the prison population was not due to violent crime (rates of which have generally declined since the 1990s), but due mainly to public policy decisions such as the issuing of more prison sentences, ‘three strikes’ laws and reductions in the availability of parole or early release. These policies were championed as protecting the public from violent offenders, but instead have increased the proportion of non-violent offenders in prisons to about 50% today. As well as that, more than 20% of those sent to prison are convicted on drug charges, with this result of the ‘war on drugs’ probably being the greatest single force behind the boom in the prison population. The cost of this massive prison system has risen by about 600% since 1980, with it costing about $23,000 a year to hold someone in jail a total of $68 billion was spent on corrections nationwide in 2006. Funding for police and judicial services, including the holding of hundreds of thousands of people awaiting trial at any given time, have also increased 4 or 5 fold over the same period and totals a further $140 billion.

There is no real sign of the escalation of the prison population reversing any time soon, although proposals such as an end to the ‘three strikes’ rule, the privatization of prisons (a process gradually occuring today), the legalization of marijuana or a greater focus on rehabilitation rather than punishment in sentencing are in some places being considered.

6. Paying off the national debt

Although the USA’s skyrocketing debt is caused by many things (the largest of which are among those other things listed here) paying off the interest on the debt alone cost $261 billion in 2008. The United States national debt is expected to pass 100% of GDP in mid-2011, a level it is projected to remain at for the foreseeable future. There is much debate among economists whether high debt levels result in slow economic growth or whether the relationship is primarily the other way around, but regardless such a financial burden being placed on an already shaky economy can’t be good.

There is a chance that the astronomical debt levels will de-stabilize the US dollar in years to come to the point where it no longer remains the world’s reserve currency, and someday not too far off there is also a small chance that oil-producing countries (particularly ones that don’t like the US) like Russia, Venezuela, Iran, Norway, etc might decide to stop trading oil exclusively in US dollars and decide to trade with a currency like the Euro as well. Such a move, if it occurred, could de-value the greenback by 10-20% and severely damage the US economy. Another possibility is that America could lose its triple-AAA credit rating (like Japan did in the 1990s when its debt shot up past 100% of its GDP), something which would also cause enormous harm on US economic interests. A combination of almost draconian austerity measures and the introduction of policies to curb other spiraling US expenditures (many of which are on this list), such as an end to the ‘War on Terror’ would be the most effective, but in many cases politically suicidal, ways to rein in US debt.

7. The obesity crisis

It is predicted that by 2015 75% of all adults in the US will be overweight and 40% obese, a higher rate than any other country in the world (although most developed countries are suffering from an obesity crisis to different extents). Already the extra medical costs of obesity are estimated to be between $75 and $150 billion in the US annually and it has been cited as a contributing factor to approximately 100,000–400,000 deaths in the United States per year (4-16% of all deaths).

The main reasons for this are the sedentary lifestyles of much of its population and the widespread consumption of cheap and unhealthy fast foods. In the last thirty years alone the prevalence of obesity in teenagers has increased from 5% to 19% with similar increases among other age groups, and in the military obesity is currently the largest single cause for the discharge of uniformed personnel. Obesity related medical problems include type II diabetes, hypertension, cardiovascular disease and an increased probability of complications arising in babies born to obese women. The costs of obesity have surpassed those caused by smoking or problem drinking and worldwide it is coming to be seen as a problem as serious in some countries as malnutrition is in others.

8. Outsourcing of jobs overseas

It has been said that America’s middle class has become globalization’s losers. So here's a little history lesson for ya. Initially free market capitalization brought enormous wealth to America, with things going swimmingly up until the end of the 1970s. During the first three decades after WW2 American incomes more than doubled, with the bottom 20% of society increasing their wealth by 120% and the top 20% by 94%, with every other group in between. It was as if the American dream had manifested itself in statistics. But then the trend reversed, Europe and Japan had recovered from the devastation of the World Wars and China was soon to open up its borders to trade. Global commerce shifted directions and businessmen left their home turf seeking new places to invest in. The United States, who’s banks had made it the world’s greatest creditor and its factories the world’s greatest exporter for four decades, shifted so much of their investments and centers of production overseas it gradually became its greatest debtor nation and net importer.

In the span of only a few decades US industry has shrunken to only half of what it once was, today it makes up only 22% of its GDP, compared to 25% in Brazil, 28% in Europe and India, 32% in Russia and 47% in China. That decline means an average of 750,000 American manufacturing jobs have gone overseas every year for the last 30 years, explaining why the US unemployment rate, even in the 1990s-2007~ boom before the current global financial crisis, was the highest inbetween recessions in the country's history. Like its massive foreign trade deficit, this is a trend that even the US government can't really solve and one that will continue for the forseeable future.

9. Christian fundamentalism

The percentage of Americans who believe in evolution is estimated to be around 40%, compared to around 60% of Europeans and researchers have noted with some alarm that the portion unsure if it is true or not has increased significantly in recent years. The portion of the US population that has no religion is also much lower than other developed countries at around 15% compared to around 15-50% in European countries and 20-30% of Canadians. A 2007 Gallup poll indicated only 45% of Americans would be prepared to vote for an atheist president, compared to 55% for a gay candidate, 88% for a women and 94% for a black president.

Over the last fifty years the influence of the ‘Christian Right’ in American politics has grown considerably, voicing their opposition to secular education, the teaching of evolution and other scientific theories (also including global warming) as fact, premarital sex, abortion, government funding for scientific fields that might contradict the bible, stem cell research and human cloning, the separation of church and state, the concept that America is not a ‘Christian nation’, the acceptance of homosexuality, gay marriage and the adoption of children by gay couples, pornography, prostitution, the use of contraceptives, planned parenthood, international co-operation and arguably anything they perceive as having a ‘liberal bias.’

The general reason for this resurgence is mainly due to the recent increase in the number of Americans and people around the world who consider themselves to have no religion (although the number of atheists is still small). A similar reaction to the perceived threat of the officially atheist Soviet Union during the cold war led to the adding of the words ‘under God’ to the pledge of allegiance in 1954, with the words ‘in God we trust’ printed on US currency for the first time four years later. It is hard to estimate how much damage Christian fundamentalists have done to the US and its international standing (they would have to be one of the most laughed at groups in the entire world) in the last half century, but their reign of 18th century style beliefs has no immediate end in sight.

10. Fighting the ‘War on Drugs’

Launched initially by Richard Nixon in the early 1970s, Reagan and Clinton subsequently escalated what could be called America’s longest running conflict. Tying in with the exploding prison population of the US, some 1.5 million Americans were arrested for drug offenses in 2008, with 500,000 imprisoned.

Several wars have also been fought partly or wholly because of the drug trade. The 1989 US invasion of Panama, which killed several thousand civilians and left 20,000 homeless, was fought partly to indict the country’s dictator Manuel Noriega, a long time US ally, on drug and money laundering charges. 'Plan Columbia', the US program of providing military and economic aid to Columbia to fight drug-dealers and far left-wing rebels, costs almost $1 billion year and has been going on since 2000. Spraying herbicides on cocaine crops with aircraft, another strategy to fight production of the drug that has gone on since the 1970s, has often backfired with local farmers complaining of health problems and damage to their crops. In addition violence fueled by drug cartels has also escalated in northern Mexico, where more than 20,000 people have died since 2006.

Overall American aid to governments in Latin America and money spent on drug law enforcement totals $44 billion every year, with that amount steadily increasing. It is estimated that legalizing marijuana and taxing it would provide $7 billion in revenues annually, while legalizing other (more harmful) drugs such as cocaine and heroin would provide an additional $26 billion. However, it is possible that legalizing such drugs could cost the US healthcare system more than their taxation revenue, making continuing or ending the war on drugs something of a lose-lose situation.

11. Probably the early affects of global warming

Although it is a hopeless exaggeration to point to any particular unusual weather occurrence as caused by anthropogenic climate change. It is equally naïve to say none have yet occurred and impacted the United States. Weather related insurance losses have increased from only a few billion to tens of billions of dollars a year since the 1980s (by comparison, 9/11 cost $20 billion), disruptions in energy supply due to extreme weather events have increased tenfold since the early 1990s (while other causes have shown little increase), heat related deaths are predicted to increase two-fivefold from around 10,000 a year today and notably the 2005 Atlantic hurricane season (the one with Katrina) was the most active on record, causing almost 4,000 deaths and costing some $130 billion. Many of the worst hurricane seasons on record have occurred since the mid ‘90s with conditions expected to worsen further. These are just some of the examples which indicate the United States is likely already paying a steep price in lives and money for its past greenhouse gas emissions.

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