In a report to clients, analysts at Goldman Sachs argue that the United States still has the world’s strongest economy — and will have for years. There is a growing “awareness of the key economic, institutional, human capital and geopolitical advantages the U.S. enjoys over other economies,” contend Goldman’s analysts.
As proof, they deploy voluminous facts. For starters, the U.S. economy is still the world’s largest by a long shot. Gross domestic product (GDP) is almost $16 trillion, “nearly double the second largest (China), 2.5 times the third largest (Japan).” Per capita GDP is about $50,000; although 10 other countries have higher figures, most of the countries are small — say, Luxembourg. The size of the U.S. market makes it an attractive investment location.
Next, natural resources. In a world ravenous for food and energy, the United States has plenty of both. Its arable land is five times China’s and nearly twice Brazil’s. The advances in “fracking” and horizontal drilling have opened vast natural gas and oil reserves that, until recently, seemed too expensive to develop. The International Energy Agency predicts that the United States will become the world’s largest oil producer — albeit temporarily — by 2020.
In turn, the oil and gas boom bolsters employment. A study by IHS , a consulting firm, estimates that it has already created 1.7 million direct and indirect jobs. By 2020, there should be 1.3 million more, reckons IHS. Secure and inexpensive natural gas also encourages an expansion of U.S. manufacturing, Goldman argues. That’s another plus.
Poorly skilled workers are often counted as a U.S. economic liability. Goldman’s perspective is different. American workers will remain younger and more energetic than their rapidly aging rivals. By 2050, workers’ median age in China and Japan will be about 50, a decade higher than in America. Moreover, the United States attracts motivated immigrants, including “highly educated talent.” A Gallup survey of 151 countries found the United States was the top choice for those wanting to move, at 23 percent. At 7 percent, the United Kingdom was second.
Finally, Goldman expects the United States to remain the leader in innovation. America performs the largest amount of research and development (31 percent of the global total in 2012) and has more of the best universities (29 out of the top 50, according to one British ranking).
Samuelson counters this optimistic view with the problem of deficits, the unsustainability of the welfare states, and other challenges for modern economies, though, arguably, other countries may be worse off in these areas than the United States is.
But can a country have a successful economy while still being in decline? Even setting aside moral and spiritual decline, consider other areas. Is our culture declining? Isn’t American art, literature, and music in the doldrums and not nearly as influential as it used to be? Are we in a political decline? Do we still have the influence abroad that we used to? How is our educational system and our intellectual establishment doing? Our technology keeps improving, but what about our psychological well-being?
What areas are declining and what areas are looking good?
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