In 2000, America was described as the sole remaining superpower - or even the world's "hyperpower". Now we're in real trouble (at the very least, you have to admit that we're losing power and wealth in comparison with China).
How did it happen so fast?
As everyone knows, the war in Iraq - which will end up costing $3-5 trillion dollars - was launched based upon false justifications. Indeed, the government apparently planned both the Afghanistan war (see this and this) and the Iraq war before 9/11.
How Empires Fall
But Paul Farrel provides a bigger-picture analysis, quoting Jared Diamond and Marc Faber.
Diamond's book 's, Collapse: How Societies Choose to Fail or Succeed, studies the collapse of civilizations throughout history, and finds:
Civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power...
of the choices has depended on the courage to practice long-term
thinking, and to make bold, courageous, anticipatory decisions at a
time when problems have become perceptible but before they reach crisis
And PhD economist Faber states:
How [am I] so sure about this final collapse?
all the questions I have about the future, this is the easiest one to
Once a society becomes successful it becomes arrogant,
righteous, overconfident, corrupt, and decadent ... overspends ...
costly wars ... wealth inequity and social tensions increase; and
society enters a secular decline.
century Scottish historian Alexander Fraser Tytler:] The average life
span of the world's greatest civilizations has been 200 years
progressing from "bondage to spiritual faith ... to great courage ...
to liberty ... to abundance ... to selfishness ... to complacency ...
to apathy ... to dependence and ... back into bondage"
[Where is America in the cycle?] It is most unlikely that Western
societies, and especially the U.S., will be an exception to this
typical "society cycle." ... The U.S. is somewhere between the phase
where it moves "from complacency to apathy" and "from apathy to
In other words, America's rapid fall is not really that novel after all.
How Consumers, Politicians and Wall Street All Contributed to the Fall
the individual level, people became "fat and happy", the abundance led
to selfishness ("greed is good"), and then complacency, and then apathy.
if you think back about tv and radio ads over the last couple of
decades, you can trace the tone of voice of the characters from Gordon
Gecko-like, to complacent, to apathetic and know-nothing.
the political level, there was no courage in the White House or
Congress "to practice long-term thinking, and to make bold, courageous,
anticipatory decisions". Of course, the bucket loads of donations from
Wall Street didn't hurt, but there was also a religion of deregulation
promoted by Greenspan, Rubin, Gensler and others which preached that
the economy was self-stabilizing and self-sustaining. This type of
false ideology only can spread during times of abundance and
complacency, when an empire is at its peak and people can fool
themselves into thinking "the empire has always been prosperous, we've
solved all of the problems, and we will always prosper" (incidentally, this type of false thinking was also common in the
1920's, when government and financial leaders said that the "modern
banking system" - overseen by the Federal Reserve - had destroyed
instability once and for all).
as for Wall Street, the best possible time to pillage is when your
victim is at the peak of wealth. With America in a huge bubble phase of
wealth and power, the Wall Street looters sucked out vast sums through
fraudulent subprime loans, derivatives and securitization schemes,
Ponzi schemes and high frequency trading and dark pools and all of the
Like the mugger who waits until his victim has made a
withdrawal from the ATM, the white collar criminals pounced when
America's economy was booming (at least on paper).
Given that the people were in a contented stupor of consumption, and
the politicians were flush with cash and feel-good platitudes, the job
of the criminals became easier.
A study of the crash of the Roman - or almost any other - empire would show something very similar.