This article explains in very simple terms why the U.S. economic woes may lead to the U.S. losing its status as the world's only superpower.

http://www.tribune-democrat.com/editorials/local_story_326091707.html

America’s reign as world’s economic king in peril

BY ZACHARY HUBBARD

The war on terror grabs headlines, but there are far greater threats to America than terrorism. Conditions are ripe for a shift in the balance of global power, perhaps in the next four to five years. When it occurs, America will no longer be the dominant economic force on the planet. As our economic power wanes, our political and military power will follow suit.

The Roman philosopher Seneca said, “If one does not know to which port one is sailing, no wind is favorable.” His wisdom applies to America’s economic situation today.

Americans must choose a new economic destination and change course soon or we stand to lose much of our national power.

If we fail to act, the world could well end up with a four-way competition among the European Union, a China-dominated Asia, a global oil cartel dominated by Russia and a nuclear-armed Iran, and a U.S.-led North American Union.

Indications of America’s waning economic power are numerous. A mortgage crisis caused by foolhardy subprime lending practices has thousands of Americans at risk of losing everything. Many financial institutions caught up in the scheme are also in trouble.

American consumer debt is at an all-time high and may cause the next major financial crisis.

The Baltimore Sun published an article on Oct. 10 titled, “Credit card debt is ready to blow.” According to the Sun, the financial industry is preparing for major defaults on the credit card debt held by Americans today, which exceeds $500 billion.

General Motors, once a global symbol of American industrial might, has suffered record losses recently and is facing financial disaster. Ford apparently has similar woes.

America’s manufacturing base is shrinking, as U.S. companies continue to ship manufacturing jobs overseas. Meanwhile, China is experiencing record economic growth funded largely by American consumers and U.S. government debt.

Failed energy policies could soon have Americans facing $5 per gallon gasoline. Looming energy shortages threaten manufacturing and other sectors. Every U.S. president since the Arab oil embargo of 1973-74 has failed to exhibit leadership in addressing America’s energy needs. Consequently, today we must buy oil from a rogue cartel dominated by Middle Eastern tyrants who hate us.

The U.S. dollar has tanked on foreign markets. Exchange rates are at an all-time low against the Euro and even the Canadian dollar. Iran has shifted its hard currency reserves to the Euro. China is threatening to do the same. Such a move by China, which holds more than $1 trillion in U.S. debt, would be devastating to the U.S. economy.

The solution to these problems rests with our elected officials on Capitol Hill. Unfortunately, all you will find there today is a do-nothing Congress that has failed to pass legislation on a single major issue this year.

Pork lovers on both sides of the isle warn of looming funding crises for Social Security and Medicare, yet they continue to increase the federal debt.

What you won’t find in Washington is a single leader with the integrity, knowledge and leadership ability to bring about significant change.

Where is today’s John Kennedy or Ronald Reagan?

Are there no statesmen remaining?

The lineup of potential nominees in the upcoming presidential election appears to lack a single candidate, Republican or Democrat, with the ability to steer the nation toward a new destiny. We need a leader with the guts to tell Americans the truth about the dangers of our present course, and the resolve to do something about it.

America’s economic problems can’t be solved using traditional methods.

The Federal Reserve can no longer simply print more currency or manipulate interest rates to save the day. With American manufacturing shrinking, we cannot reduce our huge balance of trade deficit by increasing exports. Raising taxes enough to begin paying down the staggering national debt would stifle economic growth.

There are no easy fixes.

Our problems are not purely economic. They reach to the very core of America’s national identity. Many politicians talk about repairing America’s reputation, but it’s not just our reputation that is broken.

The way we do business on Capitol Hill needs fixing. American voters must redefine the country economically by facing up to exploding personal and national debt, our disappearing manufacturing base and our dangerous foreign oil dependency. Only then may we hope to preserve our political and military might.

If party politicians continue to skirt these problems, America may suffer the same fate as the vanished democracies that preceded it.

Even the glory of Rome faded. Why should we expect our fate to be any different if we fail to tackle our problems?

Zachary Hubbard is a retired Army officer and freelance writer residing in Upper Yoder Township. He is a member of The Tribune-Democrat Reader Advisory Committee.