Some of this analysis by Niall Ferguson in the new year "Issues 2004" special edition of Newsweek, bears re-examination.
Chris Burford >>> The U. S. can inflict great damage while sustaining none, and is programmed to rebuild itself, but not others. That's its problem. .. Let's first take a closer look at the fabled $10 trillion U.S. economy. The lion's share of the annual output of the American economy is, in fact, accounted for by private consumption. That share has risen from about 61 percent in 1967 to 70 percent in 2002. As they have consumed more, so Americans have saved ever less: the savings rate averaged about 10 percent between 1973 and 1983; at its low point, in 1999, it touched 1.6 percent, and it has risen only slightly to 3.6 percent in 2003. The only way that the United States has been able to achieve such rapid economic growth in the past decade has been by financing investment with the savings of foreigners. .. Foreign lending also underwrites the American government. Some 46 percent of the total federal debt in public hands is now held by foreigners, and the bulk of the most recent purchases have been made by Asian central banks, particularly the Japanese and the Chinese. The fact that the financial stability of the United States today depends on the central bank of the People's Republic of China is not widely known. Yet the significance is great. .. As has become obvious in Iraq, the United States does not have an especially large pool of combat-effective troops on which it can draw. With about 130,000 personnel required for active service in postwar Iraq, the Pentagon admits that it is at full stretch. .. The paradox of globalization is that as the world becomes more integrated, so power becomes more diffuse. The old monopolies on which power was traditionally based-monopolies of wealth, political office and knowledge-have been in large measure broken up. Unfortunately, thanks to the proliferation of modern means of destruction, the power to inflict violence has also become more evenly distributed-so that a poison dwarf like North Korea can resist the will even of the American giant. .. The United States has the capability to inflict appalling destruction while sustaining only minimal damage to itself. There is no regime it could not terminate if it wanted to-including North Korea. Such a war might leave South Korea in ruins, but the American Terminator would emerge more or less unscathed. What the Terminator is not programmed to do is to rebuild anyone but himself. If, as seems likely, the United States responds to pressure at home and abroad by withdrawing from Iraq and Afghanistan before their economic reconstruction has been achieved, the scene will not be wholly unfamiliar. http://www.msnbc.msn.com/id/3606145/
