America’s Relative Decline: Should We Panic?
by Zachery Zeck
Over at the Washington Post, Charles Kenny has a provocative op-ed arguing that China’s GDP will almost certainly soon surpass America’s in absolute terms, and this is to the United States’ benefit (the op-ed is based on Kenny’s new book, which can be purchased here).
Kenny’s first argument in support of this claim is that Americans’ quality of life will still be better than their Chinese counterparts, and that in fact “losing the title of largest economy doesn’t really matter much to Americans’ quality of life.” Fine.
Kenny next concedes that there may be some negative effects, but nonetheless argues that these are limited. For example, he notes that the dollar may no longer be the world’s reserve currency, but “businesses in the rest of the world still manage to export, even though they must go through the trouble of exchanging currencies.” Similarly, while having the largest GDP has allowed America to maintain the largest and most powerful military, “how much [has] the three-quarters increase in defense spending between 2000 and 2011 enhanced America’s well-being?” Thus, lower defense spending could be a net positive.