Don't Panic - Unrivaled - Part 1

Introduction
About 18 months ago I started the Don't Panic segment.  With the rampant insanity in the world we all need an occasional dose of sunshine.  That first post is worth reading again (honest).  neoterra.us/blog/dont-panic

Over the past few weeks I have read three books that discuss the future as the United States (and the world) passes through the turbulence of this decade. So (if you love America) it is time for another Don't Panic post to brighten your day.

The Books That Influenced This Post
All three books, to some extent, give credence to The Fourth Turning and discuss the crisis-of-purpose and loss of faith/confidence unfolding within our country.

• As an aside, the cultural malaise is much worse in Europe, Canada, Australia and New Zealand.  BUT all three books illustrate that the Old World is largely irrelevant in how the next ten years will play out.

All three books acknowledge that the astounding growth in world prosperity over the last 80 years is the direct result of Pax Americana that has existed since the end of WWII. 

• By some, reliable estimates, more than 80% of all the material wealth created through all of human history has been created over the past 80 years.  When I look at the utter devastation of Europe and Japan following WWII, I think this estimate is plausible.

Of the three, The End Of The World Is Just The Beginning is a lengthy, gloomy, end-of-prosperity prediction. He believes that America will lose it's resolve and that safe, global trade (guaranteed by the US Navy) will collapse. However, Zeihan is a professional purveyor-of-doom, so that's to be expected from his latest book.

All three books suggest that America will continue to be prosperous (or resume prosperity) into the 2030's.

Optimism??  Really??
When you watch the nightly news (or follow social media) it is hard to feel optimistic, but our nation has been through far, FAR worse.  Much of what we are suffering today is self-inflicted (by the Democrats).

Few of you are old enough to remember the 60's.  I assure you: following the assassination of JFK and the installation of Lyndon Johnson (a traditional southern-racist Democrat and the most genuinely evil and vile person to ever hold the presidency) our country went through almost two decades of decay and decline even worse than today.

AND, the 60's was just chickenshit compared to the Great Depression, the Dust Bowl and WWII.

AND, even that was chickenshit compared to the Civil War.

This may indeed be the most discouraging period many of us have ever experienced... but the United States has been forged in fire and conflict... and has grown stronger with each challenge.

Advantages
The natural, geographical, demographic and military advantages of the United States are truly astonishing.

In my first post, I talked about our abundant agricultural and forest resources. So, I will not reiterate those today.  Suffice to say that America will never go hungry (except by government incompetence) and that America has vast (and increasing) forests, rivers and wetlands.

Productivity and GDP
The United States has the world's largest and most productive economy.  In the most recent analysis from Visual Capitalist, the US economy will achieve $26.7 TRILLION this year... roughly 25% of the entire global economy of $105 Trillion (the totals are deceptive due to global inflation, but the rankings and ratios are accurate).

China is a substantial 2nd at $19.4 Trillion.

It's important to note that all of Old World Europe combined is less than the United States!  (This is why all three books discount the importance of the economically declining Old World). 

The next decade (and the generation that follows) will be determined primarily by the United States (the hegemon) and China (the upstart challenger).

• Imagine what might happen if some enlightened leaders decided that an alliance would be better than a confrontation.  Together we would control more than 50% of the global economy and more than 90% of all military capability.   An Ameri-Sino Pax could last longer than the Roman Empire.

A Bit of Economic History
I was very surprised to learn that the mighty British Empire was already into steep decline by 1870. Even more surprising (to me), by 1880 (only 25 years after our devastating Civil War) The United States overtook Britain as the world's leading economy.

• Please look at the pic on the left. Can you imagine being surpassed by the deplorable, rural Walmart shopper class in just eight years!
  

Over the next 50 years the United States eclipsed the entire world with 42% of the world's industrial output.... and that was before WWII.  Seriously, look at the pic on the right... while England, France and Germany were shitting themselves, the United States was running a Marathon.

In short, the United States was global economic superpower, long before the Europeans gave us any respect whatsoever.  However, by the 1880's the handwriting was on the wall for anyone who actually cared to look... the United States would eventually turn the Old World inside out.

A Bit of Economic Prediction - Statistics Are Not Truth
It is widely projected that China's economy will surpass the United States within the next ten years and some people believe India will surpass us by 2070 (though that's a pretty long hedge for a prediction).  However, there are many experts who dispute these projections because they are based on assumptions that are simply not sustainable (more on that in a future post).
www.abc.net.au/news/2022-03-15/china-faces-significant-hurdles-to-become-biggest-global-economy/100912398

For the sake of discussion, let's assume that China's GDP does overtake the United States in ten (or so) years. What would be the real significance?

In my recent reading I learned that GDP is actually not a very good measure of national wealth or power. I will give but one example... there are several others.

Agricultural production is a component of GDP. I hope we all acknowledge that feeding your people is really, REALLY important (recall Marie Antoinette??).  However, the food we produce this year will all be consumed by next year... It is an economic treadmill with little residual wealth or power created. 

Real wealth is accumulated by building infrastructure and other durable products such as machinery or homes.  Real wealth (and power) can only be accumulated by whatever is left over after a society has produced whatever it needs to survive.

This seems obvious in retrospect, but I have never seen any economist look at the balance of power this way. 

As you can see in the following graphic from Visual Capitalist, in the United States (a major food exporter) only about 3 million people are engaged in agriculture, forestry and fishing. This is about 1.5% of our employed population (and much less than 1% of our total population). Almost half of this is exported or wasted producing 'green' ethanol.

China (who we are assuming will overtake us in GDP) has 229 million people engaged in feeding themselves. This is 25% of their entire available workforce and, astonishingly, this is more than the TOTAL American workforce.

India is even worse. 272 million people are needed to grow food which is 43% of their entire working population. 

The point here is simple.  Even if China surpasses us on paper (i.e. on gross GDP), 25% of their population struggles to feed themselves while about 1% of our population produces twice as much food as we need.

To put this another way, even if China's GDP does match ours, they will still be 24% behind (and that is only considering the non-durable aspect of agriculture).  China still has  along way to go to match US productivity and investment.

I plan/hope to write more tomorrow.  The advantages of the United States are not some temporary blip that will soon expire. 

• We preserved the Union in the Civil War, abolished slavery, and came closer to our ideal that "all men are created equal" , 165 years ago.
• We surpassed the Mighty (and arrogant) British Empire more than 140 years ago.
• We became a world economic superpower 100 years ago. 
• We became the world's most fearsome military superpower 80 years ago... and established Pax Americana
• We became a global hegemon with the destruction of the Soviet Union 30 years ago

It seems that a generation (or two) after every major breakthrough, we fall into some generational sickness of malaise, self loathing or self-indulgence.   We are now in that time (for my second time) and I have faith that we shall get through it.

AS ALWAYS....  DON'T PANIC