Is American Empire Declining?


-By Madan Lal Sharma, Author is Delhi-based freelance researcher.

Huge budgetary and trade deficits, rising rate of unemploment, heavy military engagements in Iraq and Afghanistan without achieving any tangible positive results are some of the indicators pointing towards the declining influence of American Empire in the world. According to John Williams, an apperance of recovery in the Unites States was created by over-counting employment and undercounting inflation.1 Cuts in Social Security and Medicare, for which people have paid 15% of their earnings all their life, would result in starvation and deaths from curable diseases.
Tax increases make even less sense. It is widely acknowledged that the majority of households cannot survive on one job. Both husband and wife work and often one of the partners has two jobs in order to make ends meet. Raising taxes makes it harder to make ends meet–thus more foreclosures, more food stamps, and more homelessness.
The last Bush budget deficit (2008) was in the $400-500 billion range, about the size of the Chinese, Japanese, and OPEC trade surpluses with the US. Traditionally, these trade surpluses have been recycled to the US and finance the federal budget deficit. In 2009 and 2010 the federal deficit jumped to $1,400 billion, a back-to-back trillion dollar increase. There are not sufficient trade surpluses to finance a deficit this large.
The US Treasury managed to unload a lot of debt thanks to ‘the Greek crisis’, which the New York bankers and hedge funds multiplied into ‘the euro crisis.’ The financial media, serving as a financing arm for the US Treasury, created panic about European debt and the euro. Central banks and individuals who had taken refuge from the dollar in euros were panicked out of their euros, and they rushed into dollars by purchasing US Treasury debt. This shift from euros to dollars weakened the alternative reserve currency to the dollar, halted the dollar’s decline, and financed the massive US budget deficit a while longer.  The possiblity of replaying the game with Spanish debt, Irish debt, and whatever unlucky country swept in by the thoughtless expansion of the European Union cannot be ruled out. However, then the question arieses as to when no countries remain that can be destabilized by Wall Street investment banksters and hedge funds, then who will finance the US budget deficit? According to P.C. Roberts, the only remaining financier is the Federal Reserve. When Treasury bonds brought to auction do not sell, the Federal Reserve must purchase them. The Federal Reserve purchases the bonds by creating new demand deposits, or checking accounts, for the Treasury. As the Treasury spends the proceeds of the new debt sales, the US money supply expands by the amount of the Federal Reserve’s purchase of Treasury debt.2
Unemployment Scenario
The jobless report indicates much worse employment situation in the United States. The US is confronted with a full-blown employment crisis and policy makers have been unable to espond to the situation with the required sense of urgency. The employment data for July 2010 showed that private employers added just 71,000 jobs during the month and that the unemployment rate remained flat at 9.5 percent.
Government workers were ‘walking the plank from coast to coast.’ About 143,000 temporary Census workers were let go, and another 48,000 government employees at the budget-strapped state and local levels lost their jobs. But the worst news, with the most ominous long-term implications, was that the reason the unemployment rate was not higher was because 181,000 workers left the labour force.3
According to Charles McMillion, the president and chief economist of MBG Information Services in Washington, and an expert on employment, says: “Over the past three months, 1,155,000 unemployed people dropped out of the active labour force and were not counted as unemployed. Even ignoring population growth, if these unemployed had not dropped out of the labor force, simple arithmetic shows that the official unemployment rate would have risen from 9.9 percent in April to 10.2 percent in July, rather than — as it has — fallen to 9.5 percent.”
He further opines that owing to normal growth in the working-age population, the labour force increases by roughly 150,000 to 200,000 people per month. If those folks were factored in, unemployment now would be even higher than 10.2 percent. According to him, there are a large number of people who have just given up hope of finding a job, and “I mean lights-out record numbers” — of long-term unemployed people who are still looking for jobs. Of the 14.6 million men and women officially counted as unemployed, nearly 45 percent have been out of work for six months or longer.4
According to broad estimates, in US there are 14.6 million people officially jobless, and 5.9 million who have stopped looking but say they want a job, and 8.5 million who are working part time but would like to work full time, you end up with nearly 30 million Americans who cannot find the work they want and desperately need. The experts feel that the U.S. will not remain a stable society if this great employment crisis is not addressed head-on — and soon.

Towards Bankruptcy
In view of America’s deepening economic crisis, Bob Chapman says: “Twenty countries (including America) are headed into bankruptcy and more will follow. That brings up the subject of state debt in the US. America has been in an inflationary depression for 18 months. States have been cutting back for two years, but still face huge budget gaps required to be closed…2011 will be a terrible year (with) 80% of states expect(ing) deficits of more than $200 billion. 2012 looks even worse.” Most worrisome, “there is no recovery and there never has been…the US economy and financial system is comatose.” The worst is yet to come and will hit hard on arrival.
In July 2010, existing home sales dropped 25.5%, the largest monthly decline since records began in 1968, bringing annualized sales back to 1995 levels, and signaling worse trouble ahead. Other housing data confirm the malaise, including new home sales, housing starts and permits.
As worrisome were increasing layoffs and first-time unemployment claims hitting 500,000, flashing red for trouble nearly three years after the initial downturn, combined with a near-22% unemployment rate, not the bogus 9.5% headline number, the 1980 calculation reengineered to conceal weakness like all other fake economic data, putting lipstick on an economy, increasingly looking and smelling more like a pig, a sick one.

Empire’s Declining Influence
Chalmers Johnson in his 2002 book Blowback wrote: “In the decade following the end of the Cold War, the United States largely abandoned a reliance on diplomacy, economic aid, international law, and multilateral institutions in carrying out its foreign policies and resorted much of the time to bluster, military force, and financial manipulation.” This policy shift was prone to produce consequences and it did. The occurrence of 9/11 was part of it because the jihadis previously sponsored by the US in Afghanistan and Bosnia had now turned their sights on America.
In the aftermath of 9/11, there was an explosive growth of bureaucracy inside the United States and increased belligerence abroad. The ostensible objective of invading Afghanistan in October 2001 was to capture Osma bin Laden; though he still remains a fugitive and American and NATO forces are still in Afghanistan.5 The Taliban — once believed defeated — is back and stronger than ever.
The invasion of Iraq in 2003 and the subsequent occupation was sold to the American public as a pre-emptive attack against a government in possession of weapons of mass destruction and willing to share them with terrorists. When it became obvious that the WMD story was one colossal hoax, the Washington’s only reaction was a shrug and “So what?” The Obama administration has sought to leave Iraq to save American face.
This transformation of America from a constitutional republic into an increasingly autocratic empire did not begin after 9/11, or even at the end of the Cold War. It did pick up speed in both cases, but its roots go farther back into history. After McKinley’s war with Spain in 1898, the U.S. acquired its first overseas possessions. Woodrow Wilson did not quite succeed in his crusade to “make the world safe for democracy,” but FDR had better luck. It was Harry Truman, however, who actually took the plunge.
By using nuclear weapons against Japan in August 1945, Washington tried to finish the war before the Soviets could get involved, and assert a position of strength in the postwar world. With the help of National Security Act of 1947, America reorganized the armed forces and intelligence, creating the apparatus necessary for fighting the Cold War and it was claimed that Communism was a global threat to the U.S. For the next four decades, the world would teeter on the brink of mutually assured nuclear annihilation, while both the USSR and the US expanded their world empires of bases and client states.
The Cold War ended in 1989, when the USSR basically gave up. Two years later, the USSR itself was gone, replaced by a patchwork of “independent states.” The jihad in Afghanistan, enginered as a weapon against the Soviets in the 1970s, was coming to an end. Francis Fukuyama famously wrote about the coming ‘end of history.’6 The power vacuum in the wake of unraveling of former Soviet Union was seen as an opportunity by ruling elite in Washington to expand its sphere of influence in a ‘unilateeral’ world.
In the post-Cold War period, Washington embarked upon gradual dismantiling the ‘Old World Order’, suborning the UN, brushing aside international law, asserting phantom rights under the guise of greater, “humanitarian” necessity. The test bed for this was the Balkans, where the U.S. got deeply involved in an ethnic war following the destruction of Yugoslavia. Richard Holbrooke later on admitted that by intervening in Bosnia, the US re-aserted its power in Europe.7
Over the years, opposition to America’s imperial adventures has waxed and waned. Much of it has been partisan; Republicans made noises about Clinton’s interventions, Democrats pilloried Bush the Lesser. Yet when push came to shove, they all got on the same imperial bandwagon, always voting to fund the wars.
Bush the Lesser and his supporters ran America — and tried to run the world — with a conviction that their willpower alone could shape the new world order.  However, the so-called “liberal” imperialists in Washington still remain convinced that the world actually desires American hegemony, and all they have to do is change the flavor.
Lust for power is considered a sin. As Lord Acton wrote in 1887: “Power corrupts, and absolute power corrupts absolutely,”8 What could be more corrupting than a desire to rule the entire world? Over and over, people have succumbed to this temptation, convincing themselves that this time, for them, it would be different. It never is.
Leaders in the United States dream of empire to gain power and wealth; to their subjects, they sell that dream as something that will make them richer and safer. Yet the pursuit of empire is bankrupting America, and Americans are less safe than ever. America’s power is no longer based on ideas, but on fear. Sooner or later, the rest of the world will stop being afraid. Chalmers Johnson argues that the Empire has already damaged American society, perhaps beyond repair.
By its aggressive and interventionist policies, Washington has not only exposed itself but has become finacially wrecked from within. American leaders have to set their house in order not to dream of a United States of World but a nation which is, like many other countries, is interdenpendent, values huma rights and will not interfere in other’s affairs. It should follow the policy of “Live and Let Live’.


  1. John Williams, available at
  2. Paul Craig Roberts, “The Ecstasy of Empire: How Close is Americ’s Demise? Without a revolution, Americans are history”, Global Research, 16 August 2010, .
  3. Bob Herbert, “The Horror Show”, New York Times, 9 August 2010, .
  4. Ibid.
  5. “Has Osama Bin Laden dead, seven years on US-Britain covering continue war terror”, Daily Mail, at .
  6. For more details on Francis Fukuyama’s concept of ‘end of history’, see .
  7. Richaar Holbrooke cited in

For Lord Acton’s quotation see

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