The sun may finally be setting on the American Century, according to The New York Times, which claims that America‘s massive and unsustainable debt will be the cause of waning influence around the world in the near future. 

Not only is the deficit out-of-control – expected to be 1.3 trillion in the 2011 fiscal year – but the nation’s projected long-term debt is even more unsustainable.  By the end of the decade, deficits are projected to rise to over five percent of gross domestic product. 
 
“[Obama’s] budget draws a picture of a nation that like many American homeowners simply cannot get above water,” The Times writes.   

Even worse, much of that debt is borrowed from foreign central banks, especially Asian powers Japan and China.  As of September 2009, China held $790 billion of U.S. debt while Japan held roughly $752 billion.   

The problem is exacerbated by the political impasse in America, in which each side is firmly entrenched in an unwavering ideological battle.  Republicans refuse to even entertain the idea of any tax increase while Democrats chafe at the though of entitlement cuts.  In reality, to put America back on a path of fiscal sanity and ensure that America remains a hegemony, there needs to be a combination of both.   

There are some analysts and experts, however, that believe America will remain the world’s preeminent power for some time.  Some believe that China, long thought of as America’s top competitor for superpower status, will not be able to maintain its current pace of economic growth long enough to pass the U.S. as the world’s largest economy. 

Others point out that America’s military might is still unmatched around the world, and that the U.S. economy is still by far the largest. 

As of 2009, the U.S. accounted for nearly half of all the world’s military expenditures.  The next closest was China at just eight percent, followed by Russia at five percent. 

And since the 1960s America’s gross domestic product has represented roughly 20 to 25 percent of the global economy.  

Still, others see America’s imminent demise.  An extremely low savings rate, the decline of America’s manufacturing base, unsustainable trade deficits and concerns about the strength of the dollar have all caused some experts to question America’s place in the world and suggest that American influence may be rapidly dwindling. 
 
“Unless miraculous growth, or miraculous political compromises, creates some unforeseen change over the next decade, there is virtually no room for new domestic initiatives for Mr. Obama or his successors,” The Times writes.  “Beyond that lies the possibility that the United States could begin to suffer the same disease that has afflicted Japan over the past decade. As debt grew more rapidly than income, that country’s influence around the world eroded.”

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