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Twilight of U.S. Economic Supremacy?

Sunday, October 12, 2008

Mohammad Ramin Khoshlessan

The rapidly unfolding economic collapse in the United States may become the biggest financial crisis in history and the contagion has already affected U.S. allies all over the world.

Some economists believe that the $700 billion bailout plan is insufficient and that $1.5 trillion is needed to overcome the crisis.

As is usually the case in such situations, the financial crisis will mostly affect the middle and lower economic strata of the United States and its allies.

Many economists believe that Bush’s $700 billion bailout plan will be a short-term fix saving only banks and investment institutes but not benefiting ordinary people, although the final version of the rescue package does include points that are meant to resolve the financial problems of smaller businesses.

If current trends continue, advances in emerging economies like China and structural problems in the U.S. economy will gradually lead to the twilight of U.S. economic hegemony.

Exorbitant spending, such as the billions in military expenditures in Iraq and Afghanistan, have increased U.S. debts and budget deficits, resulting in a further weakening of the United States’ economic might.

This crisis is a new experience for U.S. officials, which will most likely compel them to cut back on their relentless adventurism and begin to focus more on domestic issues.

George W. Bush has announced that the economic rescue plan is necessary to calm down the markets.

Meanwhile, the world has been commenting on the situation.

Russian Prime Minister Vladimir Putin said the crisis is the United States’ fault. European Commission spokesman Johannes Leitenberger said that the U.S. is directly responsible for the global economic crisis, while Banque de France Governor Christian Noyer said that French and European bank systems face numerous problems, adding, “In such a sensitive situation we must keep our calm and take measures to prevent the financial crisis from spreading to European countries.”

Back in the U.S., ever growing numbers of citizens are coming to the realization that the incompetence of the Bush administration is the cause of the country’s economic and political bankruptcy, which is a view shared by supporters and opponents of the economic rescue plan.

The latest polls show Bush’s popularity has decreased to less than 27 percent, which is the lowest rate since he was elected eight years ago and 4 percent lower than when the economic crisis started.

Although the entire world will be affected by the U.S. economic meltdown, the United States and its allies will bear the brunt of the repercussions while countries that have been less dependent on the U.S. economy may be able to weather the storm relatively unscathed.

The events of the past few weeks show that in the near future, the United States will no longer be the economic superpower that it has been over the past 60 years and that a new multi-polar global economic order is taking shape.

Source: http://www.tehrantimes.com/

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