No nation in modern history, save for the late Soviet Union, has seen so precipitous a decline in relative power in a single decade. The United States began the century with a budget surplus. We ended with a deficit of 10% of gross domestic product, which will be repeated in 2010. Where the economy was at full employment in 2000, 10% of the labor force is out of work today and another 7% is underemployed or has given up looking for a job.
Between one-fourth and one-third of all U.S. manufacturing jobs have disappeared in 10 years, the fruits of a free-trade ideology that has proven anything but free for this country. Our future is being outsourced -- to China. ...
The dollar lost half its value against the euro. Once the most self-sufficient republic in history, which produced 96% of all it consumed, the U.S.A. is almost as dependent on foreign nations today for manufactured goods, and the loans to pay for them, as we were in the early years of the republic. What the British were to us then, China is today. Beijing holds the mortgage and grows impatient as we endlessly borrow on equity and refuse to begin paying it down. The possibility exists of an eventual run on the dollar or even a U.S. debt default.
Who did this to us? We did it to ourselves. We sold ourselves a lot of snake oil about the Global Economy, interdependence, free trade and "it doesn't make any difference where goods are produced." The George W. Bush Republicans ran up the deficit with tax cuts, two wars and a splurge in social spending to rival the guns-and-butter of the Great Society.
Abandoning its role as the fellow who comes and takes away the punch bowl when the party's getting good, the Fed kept the money flowing fast and free, creating the tech bubble that burst in Y2K and the stock and housing bubble that burst at decade's end. ...
After Sept. 11, the nation was united behind a president as it had not been since Pearl Harbor. But instead of focusing on the enemies who did this to us, we took Osama bin Laden's bait and plunged into a war in Iraq that bled and divided us, alienated Europe and the Arab world, and destroyed the Republican Party's reputation as the reliable custodian of national security and foreign policy. ...
With nearly 200,000 troops in Iraq and Afghanistan and another 30,000 more on the way, al-Qaida is now in Pakistan, Yemen, Somalia and North Africa, while the huge U.S. military presence in Afghanistan and Iraq serves as its recruiting poster.
Again, it is not a malevolent fate that has done this to us. We did it to ourselves. We believed all that hubristic blather about our being the "greatest empire since Rome," the "indispensable nation" and "unipolar power" advancing to "benevolent global hegemony" in a series of "cakewalk" wars to "end tyranny in our world."
After a decade of self-delusion and self-indulgence, we must stop deceiving ourselves. ... We have a government that cannot balance its books, defend its borders or win its wars. ... At the end of the first decade of the 21st century, the question is not whether we will preside over the creation of a New World Order, but whether America's decline is irreversible.