Global Debt Comparison

Britain's Economist magazine online has a very interesting and useful interactive map on global debt, showing the public debt levels of most countries in the world. One can slide the tabs to look at past years, or projections for future years. Pop up graphics also show public debt per capita and as a percentage of GDP.

A striking feature of the global map is that it is mostly the wealthy countries (North America, Europe and Japan) that have the highest debt levels worldwide. Some of the online commentary on this phenomenon point out that many of these countries are actually in worse shape than the U.S., in terms of government debt levels.

My friend and colleague Jeff Payne (who this semester is teaching a course using The End of the American Century as one of the texts), called my attention to this Economist site, and made the following observation:

It seems the US is indeed taking out extreme debt over the recession, but not in the same level of GDP as many other developed countries. So, among the most developed nations, we are not the worst - do not know if that is anything to celebrate. Yet, in relation to your research program I wonder what this means...is the American experiment exhausted, or is the entire Western world in that same situation?

My response would be that yes, most of the Western world has government debt problems. I see the U.S. situation as far more dire, though, for the following reason. Most of those other countries accumulated their debts while financing government programs that supported health care, social welfare, education, infrastructure and the environment. Most other wealthy countries are far ahead of the U.S. in all those dimensions, as I point out in my book. The U.S., in contrast, accumulated our huge debts largely by financing consumption and military spending. All the while, U.S. health care and education languished, poverty and inequality increased, the environment and infrastructure deteriorated. So at the starting gate of the new global order, the U.S. is way behind the rest of the developed world, and too broke to catch up.

Reality and Hope in the Obama Era

What follows is the first page from the new epilogue of the paperback edition of The End of the American Century, entitled "Reality and Hope in the Obama Era."

“What is required of us now is a new era of responsibility -- a recognition, on the part of every American, that we have duties to ourselves, our nation and the world." --President Barack Obama, January 20, 2009

Much has changed, for better and for worse, since the hardbound edition of this book first went to press in early 2008. Indeed, the publication of the book in October of that year coincided with both the exhilarating finale of the 2008 presidential elections, and the meltdown of the U.S. economy. The election of Barack Obama fulfilled the first criterion of the “best-case scenario” that I posed in Chapter 10: new political leadership. Both for who he is and what he says, Obama provides the best possible hope of restoring some of America’s domestic health and international reputation, after the catastrophic lost decade of the George W. Bush administration. President Obama wants to fix the many American problems enumerated in this book—health care, education, infrastructure, the environment among them—and in the first months of his administration had already initiated policies and legislation to do so. He also pledged from the outset to withdraw U.S. forces from Iraq, to abide by international law, and to be more cooperative and multilateral in dealing with other countries.

On the other hand, as I cautioned even for the best case scenario, new leadership will not reverse or solve the problems of American decline. The problems facing this country are so systemic and deep seated—most of them long-preceding the Bush administration—that even radical changes will have only minimal impact on the trajectory of America’s decline. Furthermore, the debt-induced economic crisis that I presaged at the end of Chapter 1 is already well underway. Much of the country’s economic growth of the last twenty years was fueled by government and consumer debt, creating a giant country-sized Ponzi scheme that was bound to implode. President Obama’s well-intentioned and necessary—but enormous-- spending plans to fix things will only hugely inflate the country’s already unprecedented levels of debt. It is difficult to see how the country will extricate itself from this mess. Certainly the time frame is many years, perhaps a decade or more, and not the cheerful predictions of most economists and politicians that we will be out of the woods in a few months or years.

On the international scene, the events of the last year have been a good-news, bad-news story. The election of an African-American as President of the United States gave a huge boost to this country’s international reputation. Obama’s message of hope, reconciliation, humility and multilateralism was welcomed all across the globe, and promised to allay—at least somewhat—the ill will fostered by the Bush administration’s arrogance and belligerence. However, during America’s lost decade, much of the rest of the world had moved on, and beyond, the United States. Almost nowhere is the country still viewed as the “city on the hill” to be followed and emulated. Increasingly, foreign leaders and their populations have dismissed, criticized or mocked the U.S. and its policies. This tendency has accelerated as the rest of the world has had to bear the brunt of America’s economic and financial mismanagement. When the Chinese Prime Minister, for example, complained about “the unsustainable model of development characterized by prolonged low savings and high consumption,” there was no question which country he was referring to.

The End of the American Century Published in Paperbound

The End of the American Century is now available in paperback, with a newly added epilogue on the Obama Presidency, entitled "Reality and Hope in the Obama Era." (See the next post for the first page of the epilogue). The book is available from the publisher at the link at the top of this page, and also from Amazon, Barnes & Noble, etc.



(For readers who purchased the hardbound edition, and would like to see the epilogue, send me an email and I will provide you with that chapter.)

Dialogue and Forum on "The End of the American Century"

An extended "dialogue" on the themes of The End of the American Century has been posted on the website of the China-U.S. Friendship Exchange at this link. The interview with me was conducted by the organization's founder and president, Dr. Sheng-Wei Wang, who is based in Hong Kong. The interview focuses especially on America's changing global role and its relationship with China.

This November issue of the China-U.S. Friendship blog also includes two other essays on themes related to my book: "American Power in the 21st Century" by Harvard's Joseph Nye (author of Soft Power); and "Peace, Not War, the Best Strategy," by Professor of Geopolitics Madhav Das Nalapat at the Manipal Academy of Higher Education in India. Those two essays are accessible at this link.

My responses to those two essays will appear in the next (December) issue of China-U.S. Friendship.com.