The economic collapse on Wall Street may be the beginning of the end for the United States’ superpower status, coming about 15 years after the Soviet Union lost its superpower status, also mainly because of economic failures. The US will continue to be a powerful country, and will maintain parity with the EU and other large countries, but will eventually cede its leadership position to China. A sad day for America. Wall Street traders are short term winners, but America as a country is a long term loser. Some time soon it will be time to pay up, mostly to China, and it will be painful. I am particularly saddened because I don’t feel that I participated in the excesses that led to this debacle. If I’m going to help pay for an extravagant gambling trip to Las Vegas, I should at least have been there.
America’s real loss of prestige and power will probably not become apparent until inflation runs rampant, which is on the horizon, although exactly when is hard to say. Inflation will produce its own winners and losers. I saw this first hand in Brazil a few decades ago, but the country will be a loser. Perhaps we can take comfort from the fact that Brazil after its bouts with inflation is still out there striving to become a great power. The old saying still holds, however, that “Brazil is the country of the future, and always will be.” Perhaps the US will become the country of the past that is always trying to regain its stature.
The only good news is that Republican laisse-faire economic theories have been totally discredited. The Republican icon Ronald Reagan turns out to have been wrong. We had a baby boomer generation of good times freeloading on the hard work of World War II’s greatest generation.