Nine Signs of America in Decline

The sky isn't falling, exactly. America isn't on a fast track to irrelevance. Even in a state of total neglect, we could probably shamble along as a disheveled superpower for a few more decades.

But all empires end, and the warning signs of American decline seem to be blinking more consistently. In the latest annual "prosperity index" published by the Legatum Institute, a London-based research firm, the United States ranks as the ninth most prosperous country in the world. That's five notches lower than last year, when America ranked No. 4. The drop might seem inconsequential, especially in the midst of a grueling recession—except that most of the world has endured the same recession, and other countries are bouncing back faster.

China and India have recovered smartly from the recession, for example. Brazil seems to be barreling ahead. Australia is growing faster than expected, prompting worry among government officials who fear they may have overstimulated the economy. The United States, meanwhile, is muddling through a weak, jobless recovery, and we have a lot of problems that could make prosperity feel elusive for a long time.

Real household income in America has flat-lined, for instance, which means many middle-class families are barely keeping up with inflation. The exploding federal deficit hamstrings the government's ability to help. Healthcare is too expensive, America's manufacturing base is eroding, and two open-ended foreign wars are draining the national treasury. This is not a recipe for building national wealth.

There are still millions of diligent, innovative Americans who could help the nation dig out of its hole. But overall, the American population is falling behind, by a variety of measures. Here are some of them:

Jobs. The International Monetary Fund (.pdf) predicts that the U.S. unemployment rate will be 9.3 percent for all of 2010. That's lower than in some European nations, but it's higher than in Canada and a lot worse than most countries in Scandinavia and Asia. Overall, the U.S. unemployment rate is about average for advanced economies and likely to stay that way. It could be worse, but middling job creation isn't a sign of global leadership.

Economic growth. The IMF also predicts that the U.S. economy will grow 1.9 percent in 2010. That's a tad better than the average for all advanced economies, but at least 10 developed nations will grow faster. Woo-hoo. Three cheers for mediocrity.

Poverty. The U.S. poverty rate, about 17 percent, is third worst among the advanced nations tracked by the Organization for Economic Cooperation and Development. In that sample, only Turkey and Mexico are worse.

Education. American 15-year-olds score below the average for advanced nations on math and science literacy. But don't worry, our nation's future leaders are still ahead of their peers in Mexico, Turkey, Greece, and a few other places.

Competitiveness. In the latest global competitiveness report from the World Economic Forum, the United States fell from No. 1 to No. 2. Sure, let's console ourselves that the No. 1 country, Switzerland, is a tiny outlier nation and that getting bumped from the top spot doesn't really mean anything. Add an asterisk, and we're still No. 1.

Prosperity. The most prosperous nations, according to the Legatum report, are Finland, Switzerland, Sweden, Denmark, and Norway. These fairly homogenous European countries are the teachers' pets of global rankings, often appearing near the top because of right-sized economies and a relatively small underclass. For a huge economy like America's, a No. 9 ranking is still respectable. And part of the drop from last year's No. 4 spot is a change in methodology that puts more emphasis on the health and safety of citizens. Still, in the index's subrankings, the United States isn't even in the top 10 for economic fundamentals, safety and security, or governance. We should do better.

Health. In the Legatum study, the United States ranks 27th for the health of its citizens. Life expectancy in America is below the average for 30 advanced countries measured by the OECD, and the obesity rate in America is the worst among those 30 countries, by far. And, of course, we spend far more on healthcare per person than anybody else—but get no bang for the extra buck.

Well-being. In the United Nations' Human Development Index, which attempts to measure the overall well-being of citizens throughout the world, the United States ranks 13th, one notch lower than in the prior set of rankings. Norway, Australia, Iceland, and Canada are at the top.

Happiness. The United States ranks 11th in the OECD's measure of "life satisfaction"—behind Denmark, Finland, the Netherlands, and other usual suspects. That's not bad, but the United States is one of only four countries where life satisfaction is going down, not up. The other downer nations are Portugal, Hungary, Canada, and Japan. Plus, the research behind these rankings predates the recession, so it's likely that Americans are a lot less satisfied these days.

The overall portrait of America isn't exclusively gloomy, and in some areas we still seem to have an important edge. The Legatum prosperity index, for example, ranks America first for entrepreneurship and innovation. And in a GfK Roper survey of how nations rate as global "brands," America rocketed from No. 7 in 2008 to No. 1 in 2009, largely because the world cheered the election of Barack Obama as U.S. president. But a brand-name leader can't just strong-arm his nation back to greatness. He needs a lot of help from educated, healthy, and employed citizens determined to spread the wealth.

—With Carol Hook and Danielle Burton

Disclosure: no positions

Comments

[Moon Kil Woong:]

I guess if you want to make a flat 10 reasons you can add that a majority of American's net worth is no more than 1 year of their salary. You also need capital to invest in your future. America is rapidly squandering that at the insistance of the Federal Reserve and Treasury that want to punish you for saving and encorage you to spend in excess of what you can afford.

Like with drugs, just say no.

Oct 27 03:05 AM

[Mayascribe:]

Moon: Great comment. I sometimes hang with the 25-35 year old bracket. I see their concern. I witness how they have changed their ways. I see them becoming more responsible to themselves. I also see that they are awaking to what is wrong with the current administration. Maybe, just maybe, there is hope afterall, because those young'inz are who put Obama in the Whitehouse, are now waking up. I'm doing my best to help them.

Oct 27 03:20 AM

[Michael Clark:]

America's problems aren't starting with Obama. And putting the Republicans back in the White House is not the answer. All the corruption, the thievery, the imbalances, the excesses are inherent in the idea that business can and will police itself. Why are there laws? Because without laws the temptation to be a thief is too great for many people, especially in a culture that idealizes the philosophy of 'get it while you can' -- and 'the ends justify the means'.

We need more policing of business, not less. Obama's problem is that he is still being governed by the Republican Fed chairman, with his Inflationist ideology. Obama needs to pick up a pair of pruning shears and start working on cutting down the too big to fails. I think he's concerned that too much polarization might work against him -- but you can't reform without hurting someone's feelings.

Those who think that another dose of republicanism will save America have forgotten what 20 years of republicanism brought us...right to the abyss. Until the republicans come up with some other philosophy -- besides 'too much government' and 'get off business's back' -- I don't see how they will be relevant, considering the problems we are now facing because the government looked the other way for 20 years and let the Madoffs (and the Goldman Sachs, etc.) of the world do what they wanted, and let business export American jobs overseas.

I'm not saying it was JUST the Republicans that caused these problems -- a corruption of our government (both parties) caused these problems. But, clearly, Obama did not waltz the country to the edge of the abyss. And once he gets rid of Bernanke, he'll have taken a major step toward ending the Bush regime and starting his own.

Screaming 'socialism' is not going to help us fix our problems. We just entered our 'socialist' Night-Cycle (during which time the government will be on the side of the poor, instead of the rich) -- and it's going to last for some time now, until 2019 by my reckoning.

We had our Day-Cycle from 1983-2001 (and the rich got very rich, and everyone else got very much in debt -- and all the good paying jobs got exported in order to make the rich even richer.)

Oct 27 05:23 AM

[Dave Wrixon:]

I think you can reasonably assume the competitiveness report is just propaganda.

Oct 27 05:40 AM

[bluesky123:]

Agreed. There is a startling lack of visionary thinking emanating from either party. The White House and the opposition have access to the best thinkers in the nation. Considering how many smart, creative and talented people there are in this country, there is no clever thinking being applied to solve the nation's problems. It is not a matter of party A or party B. As far as I'm concerned both parties are morons and the best idea by America's best is another round of housing tax credits. There goes another couple trillion out the window. That's our very best idea?!?!#@ Whilst China has become a country of bold visionary ideas which they implement, we have become a country of morons. I don't know when this started but this is where we are. I want to see a well thought out 10 year plan, because it will take 10 years to get out of this mess. Deep thinking. Practical thinking. Then move boldly forward and implement visionary ideas. "If you keep doing what you've been doing, you'll keep getting the results you've been getting". On the present path America is headed for "more of the same" which is disastrous for the country's future competitiveness.


On Oct 27 05:23 AM Michael Clark wrote:

> America's problems aren't starting with Obama. And putting the Republicans
> back in the White House is not the answer. All the corruption, the
> thievery, the imbalances, the excesses are inherent in the idea that
> business can and will police itself. Why are there laws? Because
> without laws the temptation to be a thief is too great for many people,
> especially in a culture that idealizes the philosophy of 'get it
> while you can' -- and 'the ends justify the means'.
>
> We need more policing of business, not less. Obama's problem is that
> he is still being governed by the Republican Fed chairman, with his
> Inflationist ideology. Obama needs to pick up a pair of pruning shears
> and start working on cutting down the too big to fails. I think he's
> concerned that too much polarization might work against him -- but
> you can't reform without hurting someone's feelings.
>
> Those who think that another dose of republicanism will save America
> have forgotten what 20 years of republicanism brought us...right
> to the abyss. Until the republicans come up with some other philosophy
> -- besides 'too much government' and 'get off business's back' --
> I don't see how they will be relevant, considering the problems we
> are now facing because the government looked the other way for 20
> years and let the Madoffs (and the Goldman Sachs, etc.) of the world
> do what they wanted, and let business export American jobs overseas.
>
>
> I'm not saying it was JUST the Republicans that caused these problems
> -- a corruption of our government (both parties) caused these problems.
> But, clearly, Obama did not waltz the country to the edge of the
> abyss. And once he gets rid of Bernanke, he'll have taken a major
> step toward ending the Bush regime and starting his own.
>
> Screaming 'socialism' is not going to help us fix our problems. We
> just entered our 'socialist' Night-Cycle (during which time the government
> will be on the side of the poor, instead of the rich) -- and it's
> going to last for some time now, until 2019 by my reckoning.
>
> We had our Day-Cycle from 1983-2001 (and the rich got very rich,
> and everyone else got very much in debt -- and all the good paying
> jobs got exported in order to make the rich even richer.)

Oct 27 06:24 AM

[User 353732:]

1. A society where many people equate happiness with the instant gratification of the most frivolous and basest appetites cannot be happy. Once the gratification is over there is emptiness not fulfillment because the appetite is insatiable. More and more urgent gratification becomes the conditioned response, which means more and debt and greater and greater entitlements to consume beyond means and take without deserving.

2. When consuming, borrowing and importing are glorified and producing, saving and self sufficiency are derided by the Bosses, penalized by regulations and taxes and rewards are stolen via manipulated credit markets and the disgraced dollar, then, of course, net worth, income and employment will decline.

3. When sloth is encouraged and digital addictions create a superstructure of mental sickness on an infrastructure of physical addictions that lead to diseases of the body then many people will be fat, depressed and lazy....which means impaired immune systems and proliferating inflammatory diseases. Drugs , injections and surgeries are the easy and wrong response to social pathologies and depraved lifestyles. Escalating healthcare costs and declining overall health and well being are the inevitable consequences.
When everyone is a victim and no one is responsible then accountability, self control , discipline, regard for learning, respect for others, social graces and reverence for wisdom must vanish and as they do so vanish the foundations of a civil society and a Nation.

Almost every wound in the USA is self inflicted. Yet, a majority of Americans refuse to acknowledge that the knife cutting closer and closer to their heart is the one they hold in their own hand. The response of the Bosses who rule the US Plantation is to deny there are any serious wounds at all, offer more toxic drugs as palliatives and provide more free knives to the torn and lacerated people.

Oct 27 08:13 AM

[LilBob:]

On Oct 27 03:20 AM Mayascribe wrote:

> I sometimes hang with the 25-35 year old bracket. I see their > concern. I witness how they have changed their ways.
> I see them becoming more responsible to themselves. I also see that
> they are awaking to what is wrong with the current administration...

I'm one of those "25-35 set" and the problems I see, and that I hear described amongst others my own age have nothing to do with the current administration. It's pretty well known that the root of our problems right now have a lot more to do with Greenspan's insistence that "markets will police themselves" than anything Obama has said or done. Younger people today are forced to accept a lot of bothersome realities: Having a Master's Degree that you have to try to pay off while working for menial jobs-getting letters informing you that you weren't selected for an interview but "please do not be discouraged. There were over 110 applicants for this position". (quote from actual recent denial letter) Working for menial employers who consistently short the hours in your paycheck, so you have to save your pay-stubs and bring the issue up to supervisors and HR (something that started with Wal-Mart and has become endemic for all hourly workers). Alma Maters who downplay the salaries of senior deans and athletic coaches while pleading for donations through continuous mailings. A social security system that probably won't be there by the time we retire. Health care costs that are so ridiculuous most people my age don't go to a doctor-and even if you do find a job with insurance you can't get treatment for any ailments because jobs don't last very long nowadays and once something is documented as a "pre-existing condition" you won't be able to get coverage for that ailment under subsequent insurers.

The "25-35 set" is going to end up being quite a bit different from the "Me" generation, and the solution to these issues has very little to do with who the President is.

Oct 27 08:29 AM

[Donald Ingram:]

Why not make it an even ten reasons?
Number ten would be the countries loss of a moral direction. We see what greed, hubris and criminality receives on Wall Street and in Washington, and that nothing is done to curtail or curb this out right thievery, so it must be okay and I had better get mine while there is some left. There is no perceived, fair and equal rule of law anymore.
You are right in your comments Michael about temptation - my Grandfather used to say that locks are to keep honest people, honest!

Oct 27 08:55 AM

[Graham and ...:]

Dear Michael:

We really need a third party. Thumbs up to you.


On Oct 27 05:23 AM Michael Clark wrote:

> America's problems aren't starting with Obama. And putting the Republicans
> back in the White House is not the answer. All the corruption, the
> thievery, the imbalances, the excesses are inherent in the idea that
> business can and will police itself. Why are there laws? Because
> without laws the temptation to be a thief is too great for many people,
> especially in a culture that idealizes the philosophy of 'get it
> while you can' -- and 'the ends justify the means'.
>
> We need more policing of business, not less. Obama's problem is
> that he is still being governed by the Republican Fed chairman, with
> his Inflationist ideology. Obama needs to pick up a pair of pruning
> shears and start working on cutting down the too big to fails. I
> think he's concerned that too much polarization might work against
> him -- but you can't reform without hurting someone's feelings.<br/>
>
> Those who think that another dose of republicanism will save America
> have forgotten what 20 years of republicanism brought us...right
> to the abyss. Until the republicans come up with some other philosophy
> -- besides 'too much government' and 'get off business's back' --
> I don't see how they will be relevant, considering the problems we
> are now facing because the government looked the other way for 20
> years and let the Madoffs (and the Goldman Sachs, etc.) of the world
> do what they wanted, and let business export American jobs overseas.
>
>
> I'm not saying it was JUST the Republicans that caused these problems
> -- a corruption of our government (both parties) caused these problems.
> But, clearly, Obama did not waltz the country to the edge of the
> abyss. And once he gets rid of Bernanke, he'll have taken a major
> step toward ending the Bush regime and starting his own.
>
> Screaming 'socialism' is not going to help us fix our problems.
> We just entered our 'socialist' Night-Cycle (during which time the
> government will be on the side of the poor, instead of the rich)
> -- and it's going to last for some time now, until 2019 by my reckoning.
>
>
> We had our Day-Cycle from 1983-2001 (and the rich got very rich,
> and everyone else got very much in debt -- and all the good paying
> jobs got exported in order to make the rich even richer.)

Oct 27 09:41 AM

[Gregman2:]

Thank you...for your bright rays of sunshine. Once you noted that we're behind Finland in happiness, I realized...things can't really get too much worse. Maybe that's what you were trying to say?;-)

Oct 27 11:18 PM