There are many things — long-term and historical (i.e., will be mentioned in 22nd century history texts about us) trends that combine to produce our present situation. I doubt that oil is even in the top five factors. Perhaps not even in the top ten.

Note oil prices have not risen vs. other industrial commodities over the past few years, or vs. commodities in general over the past year. For more on this see More answers about Peak Oil! (or just better phrased questions).

When global oil production peaks — today or 2020 — THAT will make oil one of the major factors affecting the global economy.

As the articles quoted in the “Defense Death Spiral” post show, this game is ending as it collapses due to mismanagement (on many levels) and the costs of Empire (with no offsetting revenue).

Which is simply another way of stating your original thesis, that all empires fail eventually.

I. I agree that we have acted as the global cop. Our disagreement was..

1. Have we been paid for this role? I said no, with a few exceptions (i.e., Gulf War I).

2. Do the governments and peoples of the other major powers believe our global policing benefits them, overall? It is difficult to say, but I guess that the answer is “mixed” — at best. We could quickly learn the value they place on our police services: just ask them to pay. I suspect we all know what the answer would be.

Unless, of course, we reconfigured our Armed Forces as mercenaries. If they governed our forces, they might it worth paying for some fraction of their upkeep (probably not 100%, even then).

II. As for national sovereignty being less important… During the global expansion the amity of nations reigns, and global mechanisms like GATT run smoothly. But things might change during a long global downturn. As Ambrose Bierce said, friendship is a boat that holds two in fair weather — but only one in foul.

A more important point may be that national sovereignty is less and less important in the global economy. Global finance and capital are now making the major wealth-creating decisions, under the legal umbrella of institutions like GATT, while the state now performs mainly taxing and policing activities.

This is not to deny the major theme of this thread that the US, and necessarily Europe too (since they are even more the product of the Keynesian regime) are in for a major shock.

The primary reason I suspect we are at the end of the “Keynesian” goes directly back to Keynes. His theory did not consider the aggreagate level of debt as a key factor. While increasing debt is not inevitable in a system run according to his theories — debt incurred during recessions could be paid down during booms — it is a missing variable, with little attention on its adverse effects. So paying down debt is painful even in booms, and Keynes gives no reason to do so, we have not done so. And here we are.

The steady socialization of risk has benefited the middle class as well as the rich — such as insuring houses built in areas prone to floods and hurricanes — but, of course, to the rich much more. That’s how our government has always worked. Just more so now that is has grown so large.

Remember, it was Keynes blueprint that created the greatest wave of (real) prosperity the world has ever seen post WW2. It was complex and a large part of it was designed to prevent jst these huge imbalances and speculative ‘capital’ flows that have created this new 1929. Keynes has been too simplistically characterised as just “Govt spend more money”. Nonesense, he was well aware (wrote several papers on it) about the dangers of inflation, both asset and goods and the need for good management, regulation and controls to avoid it.

Quite correctly he identified that an asset boom is just as dangerous to an economy as a wage boom. Trouble is that Anglo Saxon Govt’s everywhere now try to avoid wage booms (for Joe Soap that is, CEOs are ok) by union smashing, wage arbitrage, etc, but love asset booms (which surprise, surprise benefit a small rich minority). Both destroy economies.

Asset booms eventually flow into general prices anyway, so most Govt’s have responded by fiddling their inflation numbers (Google real inflation). They also fiddle their unemployment numbers as well …. but that, as they say, is another story.

As the great Mogambo Guro says “better hold onto a soup spoon and a cup, as they don’t supply them at the soup kitchens”.

Another way to look at it is that we have had socialism for the rich and powerful (people and organisations) for the last 30 years and FU capitalism for the rest of us (and people wonder why I have become a conservative libertarian now).

It’s an interesting speculative exercies to imagine what lies beyond the post-WWII economic and geopolitical regime. However, do Parag Khanna and his readers recognize that this vision rests on a tower of assumptions?

Hat tip to Zenpundit!

Also, I would like to see evidence that there is any quid pro quo between, for example, between China and the US, about our role as global cop. More likely they consider us either rival powers or fools (for running an Empire from which we get little benefit). Or both.

As for foreign tourists visiting here, get used to it. We need the foreign currency. Most likely the US Dollar must fall far more, esp. vs. Asian and oil-exporter currencies, as a result of past actions. Not much we can do now to prevent it, no matter who wins the election. The task is to manage the decline and plan for the next innings. In the game of history there are almost always more innings.