The U.S. Is Declining

**LAM** · 04-21-2011, 04:24 PM

Some commentators point to the “rise” of China – to its very rapid economic growth – and say that rise spells decline for America. But in reality, economic growth is not a zero-sum game; China can rise and the US can rise too – we can all be better off.

Yet there are a number of indications that the U.S. is not rising – and much of it seems the result of what’s going on inside the U.S., not anything to do with China’s exports or U.S. companies’ ability to compete with Chinese firms. Instead, the most frightening data about American competitiveness is in areas like education, health, and infrastructure. On those measures, US competitiveness is declining relative to other countries (including China). Consider:

America’s telecommunications infrastructure now ranks 15th in the world – far behind countries like South Korea, Denmark, Iceland, Belgium.[1]

Last year an incredibly distinguished group of business leaders, academics, and policymakers – members of the "Rising Above the Gathering Storm" Committee – prepared an update to their 2005 report on the state of American competitiveness. Among their findings:[2]

No new nuclear plants and no new petroleum refineries have been built in the United States in a third of a century, a period characterized by intermittent energy-related crises.

United States consumers spend significantly more on potato chips than the government devotes to energy R&D.

In 2000 the number of foreign students studying the physical sciences and engineering in United States graduate schools for the first time surpassed the number of United States students.

GE has now located the majority of its R&D personnel outside the United States.

Sixty-nine percent of United States' public school students in fifth through eighth grade are taught mathematics by a teacher without a degree or certificate in mathematics.

Since 1995 the United States share of world shipments of photovoltaics (for solar panels) has fallen from over 40 percent to well under 10 percent – while the overall market has grown by nearly a factor of one hundred.

Japan has 1524 miles of high speed rail; France has 1163; and China just passed 742 miles. The United States has 225. China has 5612 miles now under construction and one plant produces 200 trains each year capable of operating at 217 mph. The United States has none under construction.

According to the ACT College Readiness report, 78 percent of high school graduates did not meet the readiness benchmark levels for one or more entry-level college courses in mathematics, science, reading and English.

The U.S. has eliminated or dramatically cut public funding for energy R&D (long considered the next revolutionary industry, as was semiconductors before it) and lost its competitive edge in that sector as a result. In 1987, when China launched its Program 863 to fund and facilitate R&D in sectors like clean energy, the U.S. was the undisputed leader in clean energy technology – making more than 50 percent of the world’s solar cells and installing about 90 percent of the wind power.

Today, China makes more solar cells than any other country. In the U.S., the Department of Energy’s investment in research in 2006 was one-sixth what it was in 1979. In 2005, the National Academies called for creation of an Advanced Research Projects Agency-Energy to spark an effort to regain the American lead in clean technology. But the first Bush administration rejected the proposal as “an expansion of government” into an area “more appropriately left to the private sector.”[3]

At the end of 2010 the World Economic Forum published its annual Global Competitiveness Report. On the broadest overall competitiveness measure, the U.S. dropped from second place to fourth – behind Switzerland, Sweden, and Singapore.[4] Three key subindexes are used to derive that overall competitiveness measure; they include:

On basic requirements the U.S. ranked 32nd (compared to 28th in 2009-10)
On efficiency enhancers the U.S. ranked 3rd (compared to 1st in 2009-10)
On innovation and sophistication factors the U.S. ranked 4th (compared to 1st in 2009-10)

While the U.S. still ranked first in innovation, its ranking (relatively low, and declining) on basic measures like institutions, infrastructure, and health and primary education should worry American policymakers. These data are worrisome regardless of what China is doing, because a decline on measures like education, health, infrastructure, and government support for R&D portends a lesser ability to grow productivity – and productivity growth is what drives the US economy. They portend a future in which the U.S. no longer ranks first in innovation.

The solution? It’s not to blame China for America’s economic woes – that leads to fear-based protectionist policymaking. What could be helpful is fostering America’s competitive spirit – not one that erects trade barriers but one that fuels innovation; this is the “Sputnik moment” President Obama referred to in his State of the Union address earlier this year. Read more about what the U.S. can do to reverse its decline.

This article is part of Issues in Depth: Is China Rising? Is the US Declining? Click here to explore this issue in depth – to read more articles similar to this one, see relevant data charts and graphs, and hear from the experts.

[1] OECD Broadband Statistics, OECD Broadband Portal

[2] Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5

[3] The Betrayal of American Prosperity, p. 268.

[4] World Economic Forum, 2010-11 Global Competitiveness Report

The U.S. Is Declining | Future of US / China Trade

**Diesel618** · 04-21-2011, 04:39 PM

Interesting read.

On a non-related note...I can't wait until China sets up bases in Texas and Wyoming under the alias of 'protecting us from corrupt leaders' and 'spreading communism'...maybe then Americans will wake up before throwing the "support our troops" bumper stickers on their cars.

**Big Smoothy** · 04-21-2011, 05:57 PM

Originally Posted by LAM

Yet there are a number of indications that the U.S. is not rising – and much of it seems the result of what’s going on inside the U.S.

America's decline - which no one disagrees is happening - is happening because of America's policies.

65+ years of Neo-liberal policies are now providing the realistic result.

We are living in a neo-liberal world. A race to the bottom.

Absolute advantage
Comparative advantage
Competitive advantage

**Realist** · 04-22-2011, 11:17 AM

And Trump says he'll use his magic to fix it. Yeah right.

**Darkcity** · 04-22-2011, 11:21 AM

Our leaders have failed us and this is a direct result of what they have been doing over the last 50 years. We have never had any REAL leaders with an honest agenda.

**Diesel618** · 04-22-2011, 11:23 AM

oh yeah I forgot the elected are puppets for the invisible leaders of the almighty devil-worshipping freemason regime

**LAM** · 04-23-2011, 12:14 AM

Originally Posted by Darkcity

Our leaders have failed us and this is a direct result of what they have been doing over the last 50 years. We have never had any REAL leaders with an honest agenda.

for the most part both the Dems and GOP have sold out to big businesses at the long term expense of "the country". once the government got involved in the markets in the 1920's, it's pretty much been a wrap since. the US has run a deficit since '61. Clinton almost had WWII debts paid down but then they got ran up again, way high... the Dems still fight for labour but for the most part everyone has shifted to the right cause that's where the $ is (big multi-national corps). the problem is trying to undue this intermingling of government and big corporations is like trying to unscramble an egg, impossible....

**hoyle21** · 04-23-2011, 06:00 AM

Originally Posted by Big Smoothy

America's decline - which no one disagrees is happening - is happening because of America's policies.

65+ years of Neo-liberal policies are now providing the realistic result.

We are living in a neo-liberal world. A race to the bottom.

Absolute advantage
Comparative advantage
Competitive advantage

It seems to me the republicans have been in charge more often than Dems....Not that I'm trying to blame one side. Republicons and Dumbocrats are just two heads to the same coin.

Also curious what you see as a difference between neoliberal and neoconservative.

**LAM** · 04-25-2011, 02:50 PM

And it's because of clowns like Paul Ryan that prefer ideology over logic that the US will continue to fall behind....check out some of his plans

Ryan’s Step Backward for Education
House Budget Committee Chairman Proposes Shortsighted Cuts to Education
Ryanâ€™s Step Backward for Education

**bandaidwoman** · 04-26-2011, 08:31 AM

In medical research I am seeing more foreigners than amercians as heads of departments ( you have to have both excellent clinical and research backgrounds). As a an ex-research analytical chemist and now medical researcher I am seeing foreign grads parasitize our system and now take their skills back to their country where they are professors etc. and building up their postgraduate powerhouses of the future.

We need to invest in healthy americans, and healthy respect for the sciences, which means national health insurance and more stringent public educational standards where students who can't cut it are allowed to fail, not coddled. Unfortunately, the best and brightest are still encouraged to go into coorporate law or standford business schools, not engineering, chemistry, physics etc. For instance, the top students in medical school want to go into interventional radiology which pays a fortune, not as a lab rat doing research for the good of future medical inventiveness like us dumber med grads......

**LAM** · 04-26-2011, 06:16 PM

when I worked in R&D most of our department heads were Americans but all the senior engineers and analysts were Indian and this was a decade ago. for each guy like me that had dual engineering degrees there was an Indian with a double masters or Phd. As far as I know all the guys that I worked with a Lucent, NSTL, Agilent, Cisco that were Indian have all returned back home to work full time. you can't fault them for wanting to help change their country.

**irish_2003** · 04-26-2011, 06:18 PM

Is China Preparing to Dump its $1 Trillion of Treasuries?*|*NetRight Daily

**Big Smoothy** · 04-27-2011, 05:54 PM

An update on Bernanke's press conference. Useless but worth the comedy.

**~RaZr~** · 04-27-2011, 07:59 PM

Originally Posted by bandaidwoman

In medical research I am seeing more foreigners than amercians as heads of departments ( you have to have both excellent clinical and research backgrounds). As a an ex-research analytical chemist and now medical researcher I am seeing foreign grads parasitize our system and now take their skills back to their country where they are professors etc. and building up their postgraduate powerhouses of the future.

We need to invest in healthy americans, and healthy respect for the sciences, which means national health insurance and more stringent public educational standards where students who can't cut it are allowed to fail, not coddled. Unfortunately, the best and brightest are still encouraged to go into coorporate law or standford business schools, not engineering, chemistry, physics etc. For instance, the top students in medical school want to go into interventional radiology which pays a fortune, not as a lab rat doing research for the good of future medical inventiveness like us dumber med grads......

Being in the Medical field, I can agree 100% with this

**antisocialcreep** · 04-30-2011, 12:21 AM

sad but true, america has become its own antithesis

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