Will America Collapse In 2025?
A strange article has been making the rounds lately. Alfred W. McCoy, a University of Wisconsin-Madison history professor, has written an essay called The Decline And Fall of the American Empire. Salon posted the article under the title How America Will Collapse (By 2025).

I say "strange" because the essay's principal focus—the collapse of our military power—is oddly out of touch with America's current economic problems, which are very serious indeed. So I found the article to be curiously optimistic (not to mention misguided) about how future events may play out.

Despite the aura of omnipotence most empires project, a look at their history should remind us that they are fragile organisms. So delicate is their ecology of power that, when things start to go truly bad, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, 11 years for the Ottomans, 17 years for Great Britain, and, in all likelihood, 22 years for the United States, counting from the crucial year 2003.

Future historians are likely to identify the Bush administration’s rash invasion of Iraq in that year as the start of America's downfall...

Good God, man! If we look at the economic data covering household debt, health care costs and other indicators, America's decline started in the early 1980s. That's the view I take here at DOTE. We were well on the way down by 2003. Hindsight is always 20/20, but the Housing Bubble was the logical outcome of economic trends (e.g. stagnant or declining income) that had been in place for 20 years.

Available economic, educational, and military data indicate that, when it comes to U.S. global power, negative trends will aggregate rapidly by 2020 and are likely to reach a critical mass no later than 2030.

The American Century, proclaimed so triumphantly at the start of World War II, will be tattered and fading by 2025, its eighth decade, and could be history by 2030.

I'm sorry to be harsh here, and I don't like to repeat myself, but where has Alfred been? Negative trends will aggregate rapidly by 2020? For economic and education data, "negative" trends have been in place for decades, aggregated or not. Our society is "tattered and fading" right now. For example, America's long-neglected infrastructure is falling apart. The American Society of Civil Engineers gives our crumbling infrastructure a grade of D, and says we need to spend $2.2 trillion to fix it. But we don't have the money or the will to fix it.

McCoy devotes a small section of his long essay to our economic decline and offers a collapse scenario—

Today, three main threats exist to America’s dominant position in the global economy: loss of economic clout thanks to a shrinking share of world trade, the decline of American technological innovation, and the end of the dollar's privileged status as the global reserve currency...

Such negative trends [in trade, competitiveness and education] are encouraging increasingly sharp criticism of the dollar's role as the world’s reserve currency...

After years of swelling deficits fed by incessant warfare in distant lands, in 2020, as long expected, the U.S. dollar finally loses its special status as the world's reserve currency. Suddenly, the cost of imports soars. Unable to pay for swelling deficits by selling now-devalued Treasury notes abroad, Washington is finally forced to slash its bloated military budget. Under pressure at home and abroad, Washington slowly pulls U.S. forces back from hundreds of overseas bases to a continental perimeter. By now, however, it is far too late.

Faced with a fading superpower incapable of paying the bills, China, India, Iran, Russia, and other powers, great and regional, provocatively challenge U.S. dominion over the oceans, space, and cyberspace...
Many of us, and almost all shrewd investors, are waiting now for a crisis in the bond market. The United States is broke, bankrupt, insolvent, fiscally kaput! We won't be broke in 2020 as McCoy says—we can't pay our bills now! Already $14 trillion in debt, it appears that our deficits will be in the 1.3-1.4 trillion dollar range for at least the next two years, and very likely much longer—if business as usual continues. But few knowledgeable observers expect that this fiscal nightmare can continue, even for a few years.

As I described yesterday in Let's Have That Adult Conversation, this public debt catastrophe is unfolding right before our eyes. It hardly matters if the dollar remains the world's reserve currency in this context. When our foreign creditors give us that big vote of No Confidence, there will be a new Era of Austerity in America. One way or another, fiscal discipline will be enforced. It alway is.

And then there is McCoy's oil shock scenario—

The United States remains so dependent upon foreign oil that a few adverse developments in the global energy market in 2025 spark an oil shock. By comparison, it makes the 1973 oil shock (when prices quadrupled in just months) look like the proverbial molehill. Angered at the dollar's plummeting value, OPEC oil ministers, meeting in Riyadh, demand future energy payments in a “basket” of Yen, Yuan, and Euros. That only hikes the cost of U.S. oil imports further. At the same moment, while signing a new series of long-term delivery contracts with China, the Saudis stabilize their own foreign exchange reserves by switching to the Yuan. Meanwhile, China pours countless billions into building a massive trans-Asia pipeline and funding Iran's exploitation of the world largest natural gas field at South Pars in the Persian Gulf.

Concerned that the U.S. Navy might no longer be able to protect the oil tankers traveling from the Persian Gulf to fuel East Asia, a coalition of Tehran, Riyadh, and Abu Dhabi form an unexpected new Gulf alliance and affirm that China's new fleet of swift aircraft carriers will henceforth patrol the Persian Gulf from a base on the Gulf of Oman...

A few adverse developments in the global energy market in 2025? Try 2012, or 2013 or 2015. From a longer range historical perspective, peak oil is already here. I've predicted that the next oil price shock will be in 2013 ± 1 year. Oil prices (on average) will flirt with $100/barrel this year and the next, depending on how the shaky global economy fares. I'm hoping we'll all be walking upright by the time we get to 2025.

McCoy's oil expert appears to be UMass-Amherst professor Michael Klare, whom he quotes twice. But Klare has always been more concerned about the geopolitics of oil and projections of American military power than about oil reserves and production. Klare also predicted that we (or Israel) would bomb Iran in 2006. Didn't happen.

McCoy devotes most of the rest of his essay imagining various military catastrophes, including World War III, which might occur between now and 2025. I thought his point about "micro-militarism" is well made.

Counterintuitively, as their power wanes, empires often plunge into ill-advised military misadventures. This phenomenon is known among historians of empire as “micro-militarism” and seems to involve psychologically compensatory efforts to salve the sting of retreat or defeat by occupying new territories, however briefly and catastrophically. These operations, irrational even from an imperial point of view, often yield hemorrhaging expenditures or humiliating defeats that only accelerate the loss of power.

Embattled empires through the ages suffer an arrogance that drives them to plunge ever deeper into military misadventures until defeat becomes debacle...

[My note: Does he mean "ill-advised military misadventures" like Afghanistan?]

Otherwise, McCoy spins various fantasies which are fun to read but aren't worth speculating about. I will say that the bankrupt United States can not afford the doomed military adventures it's already engaged in. I wonder how we will pay for future fiascoes if nobody will lend us any money.

The emphasis on America's military power throughout McCoy's essay is misplaced. The Empire's power has always derived from the sheer size and quality of its economic dominance in combination with it's military might. One can not exist without the other, so our severe economic decline no longer supports new military adventures. However, America's ruling elites love wars, and as the Empire goes downhill I'm sure they'll try to blow up some people somewhere. Shock and Awe. But I think these new atrocities will be short-lived, limited in scope, and bound to fail.

Our now rapid economic decline together with our disastrous oil dependency will seal America's Fate. I don't indulge in scenario spinning on DOTE. I can't know the future precisely and neither can anybody else. That said, the Empire started declining in 1983, not 2003 as McCoy says. Deplorable trends (in finance, income, debt, energy, infrastructure, education, competitiveness, trade & manufacturing, etc.) have thus had a long time to become deeply entrenched. The Iraq war did not signal the beginning of our decline. That's an absurd conclusion which reflects McCoy's emphasis on military matters and his misunderstanding of our currently untenable economic position.

Thus the time to prepare for the worst is basically now or within five years from now, not 2025 or 2030 as McCoy claims. I do not know exactly what the word "collapse" means, but I'm quite certain there's still a lot of room for things to fall apart. And that's the way it's going. When I started this blog 11 months ago, there were 39.4 million people on food stamps. Now there are almost 43 million.

I would not bother to write a blog called Decline Of The Empire to warn you about events which still lie 15 or 20 years in the future. McCoy's distant time frame probably explains why Salon, an on-line magazine that devotes a lot of time to reviewing television sit-coms and other fluff, saw fit to reprint his article