PART 1: US ECONOMIC AND FINANCIAL STRENGTH
Decline in US Share of World Production
A central element of the waning US empire argument comes from the unparalleled economic rise of China. As a productive powerhouse, the US has been losing ground. As of 2019, before the COVID year reduced it further, the US share of world manufacturing amounted to 16.8%, while China was number one, at 28.7%.
Similarly, the US Gross Domestic Product itself (GDP) slipped from 40% of the world economy in 1960 to 24% in 2019. GDP is the total market value of all the finished goods and services produced within a country.
When GDP is measured by the world reserve currency, the dollar, the US ranks first, at $21 trillion, with China number two at $14.7 trillion. Using the Purchasing Power Parity measure of GDP, which measures economic output in terms of a nation's own prices, China's GDP surpasses the US at $24.16 trillion. By either measure, a steady US erosion over time is evident, particularly in relation to China, and a major concern for the US bosses.
Worsening US balance of trade reflects this decline. In 1971 the US had a negative balance of trade (the value of imports greater than the value of exports) for the first time in 78 years. Since then, the value of exports has exceeded that of imports only two times, in 1973 and 1975. From 2003 on, the US has been running an annual trade deficit of $500 billion or more. To date the US rulers "pay" for this by creating dollars out of thin air.
Ballooning US National Debt
The ballooning US national debt is considered another indicator of US imperial demise. The US debt clock puts the national debt at $28.9 trillion, up from $5.7 trillion in 2000. According to International Monetary Fund (IMF) numbers, the US debt is 118% of the GDP, near a historic high point, up from 79.2% at the end of 2019.
The international reserves of the imperialist nations do not even cover 2% of their foreign debt. In contrast, China tops the list with the largest international reserves, which covers 153% of its foreign debt.
However, today US debt as a percent of GDP is lower than in World War II, at the height of US economic supremacy. Germany's debt to GDP ratio is 72%. Japan's is 264%, making its debt over two and a half times the size of the country's GDP. China's is 66%.
Yet a key concern with the ballooning national debt à ˆ' inflation caused by creating money backed with no corresponding increase in production à ˆ' hasn't been a problem in any of these countries, not even Japan. The immediate issue with debt is not its size in trillions of dollars, but the degree annual economic growth exceeds the annual interest payment on the debt.
In the US, this payout costs almost $400 billion a year, 1.9% of GDP. Federal Reserve Board president Powell stated: "Given the low level of interest rates, there's no issue about the United States being able to service its debt at this time or in the foreseeable future." Former IMF chief economist and president of the American Economic Association, Olivier Blanchard likewise declared: "Put bluntly, public debt may have no fiscal cost" given that "the current US situation in which safe interest rates are expected to remain below growth rates for a long time, is more the historical norm than the exception." According to these ruling class economists, the huge size of the US national debt presents no economic difficulty for their bosses.
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