Our infrastructure is crumbling, China is mopping the floor with us in trade, our public schools are horrible, racial tensions are tearing us apart, university is becoming prohibitively expensive for millions and everywhere you look around the world the U.S. is in retreat. Sounds terrible right? But is this reality or just a slanted perception? If you watch the news, you would think Chicago is close to sliding into Middle Eastern style anarchy and ISIS is on the verge of hoisting a black flag above the white house.
In fact, despite all the fear mongering we live in one of the safest times in recent memory and the U.S. is still overwhelmingly dominant on the world stage. Is the U.S. as dominant as it was in 1960, 15 years after World War II and the economies of most of the developed world were recovering from partial or almost complete destruction and China had hundreds of millions in dire poverty on the verge of starvation? No, but do we necessarily want to go back to a time when everyone in the US was about one third as wealthy as they are now? If you don’t think that is true look at the chart of real GDP per capita in the U.S. from 1960 to 2015.
US GDP per capita was $17,306 in 1960 in 2015 dollars and as of 2015 stood at $51,486 according to The World Bank. Despite all that has happened in the last 50 years, the US and most of the world for that matter is just plain richer than it was 50 years ago.
We tend to lose sight of this in the U.S. because we are so inwardly focused. So I decided to take a look at how the US fares as a whole compared to the rest of the world today instead of looking into the past. There is no one way to measure dominance or greatness since it is such a subjective topic so I thought I would look at a couple of factors that I think play important roles in what still keeps the U.S. so important.
We all know the U.S. armed forces have a good number of troops and a lot of high-tech weaponry. However if you take a look at it by the numbers, you start to notice how far ahead in terms of a lot of factors the U.S. is.
An aircraft carrier is a way to project power anywhere in the world and the U.S. has 19 of them compared to the next most country France with 4. Aircraft carriers can send troops, aerial assaults missiles to just about anywhere in the world. They are literally floating cities complete with an airstrip. In addition, there are 10 nuclear powered aircraft carriers in the U.S. fleet currently compared to 1 for the rest of the world (France). This matters because nuclear powered carriers pretty much never have to refuel for the life of the ship and essentially are only limited by the supplies they need to keep the crew going.
China had hundreds of millions of more people and hence has a natural manpower advantage over every country but when looking at current active duty military personnel, the U.S. has 1.4 million ready to go today, which is 2nd only to China with 2.3 million.
A look at the total military aircraft at each country’s disposal paints a similar picture. The U.S. dwarfs the rest of the world in total aircraft and dominates it in most of the sub categories as well including fighter jets, military transport equipment and reconnaissance aircraft.
In addition, the U.S. is reported to have over 800 military bases around the world. No country even comes close to this. Some of these consist of “lily pads” with fewer than 200 personnel that can act as a launch point for troop movements and a number of unconfirmed lily pads which stretch the reach of the military even further beyond its official outposts.
You can’t have a great military power unless you have the means to pay for it. Economic power is rocket fuel for the equipment and technology establishing the military power.
The U.S. greatly benefits from having the dollar as the essential reserve currency of the world, which is essentially a legacy of World War II and the Bretton Woods economic system designed after the war. This allows the U.S. to likely borrow at rates it may not have been able to were this not the case as well as exert influence in countries not directly trading with the U.S. by blacklisting banks that the U.S. considers to have done business that it doesn’t approve of. In addition it indirectly controls the money supply and interest rates of all the countries with currencies fixed to the dollar and with dollarized economies (Panama, Saudi Arabia, Ecuador etc.).
Even though the story of the past few decades has been of China’s economic rise and of the breakneck growth of emerging economies, the U.S. still accounts for over half of the market capitalization of developed and emerging markets (i.e. the value of all the shares traded on the exchange of those countries). I was reminded of this when I visited the New York Stock exchange a few years ago and representatives from Peru were explaining how small the size of their stock market is by mentioning it was small compared to its neighbor Brazil. Then they pointed out that just Apple Inc. shares trade the entire market capitalization of the Brazilian stock market in one morning.
In addition, the strength of not just a large workforce but a large relatively educated and diverse workforce provides a huge pool to tap from in terms of economic manpower, which shows the strength of the population of the US. In terms of world GDP, the U.S. is still a huge contributor, and although China is now closing in as second, the U.S. still producing a GDP that is greater than those of the next 3, India, Japan and Germany, combined.
Population and Immigration
The US has the third largest population of any country, currently at about 320 million people. The Labor force is 155 million of literate and relatively well educated populace. Due to its diverse and open economy, the U.S. attracts many immigrants. I would argue that this is a source of strength. Even if immigration causes tension, bringing fresh ideas, talent and skills serves to increase the economic pie for everyone and betters the population as a whole. Cities are usually where ideas and people cluster and as shown in the chart below, the U.S. is the only country with 2 cities on the list of the most diverse cities in the world.
Taking this chart into perspective, you may notice that all the cities listed here are in advanced economies with relatively rich populations. That is not a coincidence, after war, the biggest mover of people is jobs and these places offer enough opportunities to those who show up to attract millions of people. We often take this diversity for granted because we are so focused on people’s differences, but the fact that so many places in the U.S. are so diverse is a testament to the strength of the economy and of the country as a whole.
The country also benefits from the English language being its primary language. Being that English is the most widely spoken nonnative language in the world, immigrants benefit from practicing and learning it here as well as using it here if they are already fluent when they arrive. In addition the worldliness of the language works the other way as an advantage to Americans doing business overseas and to entertainment and culture. Does anyone know who the Albanian speaking Michael Jackson is? No, but the whole world knows the English speaking and signing pop stars.
This one is not as often discussed but from a social, economic and military perspective actually shapes a lot more of the strength of the U.S. than we realize. In his book Prisoners of Geography, Tim Marshall points out some fascinating details as to how borders and geography shape history and politics all over the world. He discusses the different regions of the world and how their borders affect their political mindset and strategy internally and towards the outside world. In his chapter on the U.S. he highlights the diversity of the geography in the U.S.; the fertile East Coast Plain, the Great Plains with large navigable rivers, the massive mountain range of the Rockies, the desert west of the Rockies the Sierra Nevada Mountains, the coastal plain of the West Coast, which boasts some of the most productive stretch of farming land on the planet and the Pacific Coast. In addition to this the U.S. has the Tundra in the Arctic of Alaska, tropical islands in the Pacific and Caribbean and when you include the often overlooked territories in the Caribbean and Pacific as well, creates a vast span of national territory as can be seen just from a screen shot of Wikipedia here:
I addition, if any attempt to invade the U.S. was ever contemplated, Marshall also notes:
As we say with Russia, there is “strategic depth” for a defending force to fall back into. Equally important, anyone stupid enough to contemplate invading America would soon reflect on the fact that it contains hundreds of millions of guns, which are available to a population that takes its life, liberty and pursuit of happiness very seriously. In addition to the formidable US Armed Forces, there is the National Guard, state police and as we’ve seen recently, an urban police force can quickly resemble a military unit.
This is often taken for granted by Americans. How many countries can say they have glaciers and rain forests? A flight from New York to Hawaii takes 10 hours and you are still in the U.S. when you arrive.
There is always a lot that could be done better and on which the U.S. could improve upon. It is important however to take a step back and realize the great progress the country has made over the past 50, 100 and 150 years and not take the great privileges people here are given for granted. When politicians are speaking of decline and stagnation, these are often for political points rather than reflections of reality. One of the great intangibles I have not mentioned is the sense of optimism that many Americans have. Emphasizing the opportunities and the resources at hand before the country, instead of emphasizing its deficiencies will serve the country as a whole, better moving forwardThe information provided by www.cashchronicles.com is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs. www.cashchronicles.com does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any tax or investment decision without first consulting his or her own financial advisor or accountant and conducting his or her own research and due diligence. To the maximum extent permitted by law, www.cashchronicles.com disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.