Problem Management — examples
Economic Collapse

A Dying Nation

Ray Butterworth     2001-Sep-03
Facing a dying nation
Of moving paper fantasy
Lis'ning for the new-told lies
With supreme visions of lonely tunes.

As the song says, the U.S. is a dying nation. The only problem is, they won't face up to the fact. Most news media are controlled by their ratings, and most people want to hear about bad things happening to other people, not to themselves.


At almost all levels (social, economic, religious, military, educational, etc.), the infrastructure that made the U.S. the greatest and most powerful country on earth is rapidly deteriorating. Some of these factors are fairly obvious (e.g. the U.S. has an incredibly high rate of imprisonment, far higher even than in countries with the most repressive governments; it leads the world in drug addiction; its entire military force is now too small to mount even a localized operation like Desert Storm), but others are just beginning to force themselves into the news.

Consider the energy supply, which has recently run into difficulty in California. Over the last decade, the use of electricity in the U.S. has increased by 30%, but the nation's transmission capacity has increased by only 15%. Is it any wonder that supply can't meet demand? Much of this electricity comes from burning petroleum. How well are they doing on that front?

In 1973, at the height of the Arab oil embargo, the U.S. imported 36% of its oil, and suffered severe shortages. Seeing that it was obvious that their economy was effectively in the hands of foreigners, the U.S. government started a program of initiatives such as the Strategic Petroleum Reserve.

And today, after suffering those shocks and taking steps to prevent the situation from ever happening again, the U.S. has changed its dependency on foreign oil from 36% to 54%. In addition, it has decreased the number of refineries by 50%, and in fact no new refinery has been built in the last 25 years.

Less than a year ago, oil shortages caused skyrocketing prices and president Clinton made a symbolic gesture of releasing 30 million barrels of oil from the Strategic Petroleum Reserve. What wasn't announced was that even that token amount had to be shipped overseas to be refined as there wasn't capacity for it in the domestic system.


Not even counting such unreported activities as illicit drug trading, in the year 2000, American imports exceeded exports by over 435 billion dollars. That means that for every man, woman, or child in the country, $1500 more was spent than was earned. This is for the country's economy as a whole, and has nothing to do with personal debt, something that itself is an incredible problem.

This trade imbalance has been going on for many years and shows no sign of abating as domestic industries shut down and rely more and more on cheap imported products. Every American's share of their country decreases by $1500 every year.

Any person or business that continually spent more than it earned would very soon become bankrupt. Similarly any country would find its money rapidly devalued, the cost of imported items would increase.

Yet the U.S. dollar is higher than it has ever been and still climbing, and the average citizen continues to have the highest standard of living in the world. But given its crumbling internals, how can that be?

Selling the Farm

The secret is that the billions of dollars shipped out of the country each year are in fact making their way back. But, rather than being spent on U.S. produced goods or services, they are being used to purchase U.S. assets.

Europe's leaders may not even fully understand what they're doing. The rest of the world hasn't a clue. … The rush is astonishing. According to Mergerstat, a Los Angeles research service, foreign companies in the past three years have taken over 2,779 U.S. companies worth a stunning $766 billion. Three quarters of that money is from Europe.
International Herald Tribune, 2001 July 3

That is, the U.S. is selling the farm to maintain its high lifestyle. And it's selling it at an ever increasing rate that eventually must fail, and fail catastrophically.

And what about this Europe?

United Europe

Europe is rapidly becoming the United States of Europe, with all economic, monetary, and military control being concentrated in a central governing body. Many member nations have already signed into this plan, silently surrendering many of the centuries old rights and freedoms of their citizens, and in just a few months, many of those countries will abandon their traditional monetary system and completely switch to the Euro.

Soon, other countries will not be dealing with France or Italy, but simply with Europe, an entity that is far larger than most people yet realize. For instance, when considered as a single country, Europe has a larger population and gross domestic product than that of the United States. But how can Europe, a disunited group of countries with thousands of years of history of war, suddenly act as a cohesive group?

The answer is that it has happened in the past. Two thousand years ago the Roman Empire controlled most of Europe. And several times since then, there have been more or less successful attempts at uniting Europe, often under the title of Holy Roman Empire.

And in the last few hundred years, which people has tried to unite Europe once again, and which same people is noted for its ability to organize, control, and govern in a most orderly fashion?


Few countries are going to listen to the demands of France or Italy, much less Liechtenstein, especially when those demands are for things that are in the interest of that specific country, and presented in very emotional terms. Germany has a large population and very strong economy, and for centuries has had a vision, which far outweighed any parochial desires, of being part of a European empire. So when Germany presents ideas that are good for the whole of Europe, and presents them in a logical way, with no emotion other than the desire for a greater Europe, the other countries are going to listen, and they are going to follow.

This is especially true when the Vatican endorses these policies. Most of central Europe is significantly Roman Catholic, and with the recent ecumenical movement (something that is definitely not unrelated to this discussion, but worthy of its own), many other denominations (e.g. Anglicans, Lutherans) are heading toward reunification with their mother church.

The central bank of the new European Union is patterned after and run by the German banking system, and the gold reserves for all member nations are now being stored in Germany.

NATO is slowly dissolving, and being replaced by a European controlled rapid deployment force. And naturally enough, Germany is the dominant power in this new army.

There's little doubt that Europe, (possibly not including the U.K. by then), will soon make itself known as a new world power, both economically and militarily.

When it comes to international trade, there has been a long association with the South American countries via Spain and the Vatican (not to mention the fabled but true stories of Nazi settlements). While the U.S. still talks about the possibility of a free trade agreement including South America, Europe has in effect already done it. Europe talks the same language and uses the same standards and system of measurements. Why should the South American countries waste time dealing with those archaic Yankees?

The Fourth Reich

Germany may have lost two world wars, but in the greater scheme of things those were really just battles, not wars. Hitler provided the political charisma, but he was not the real power; merely a puppet that got out of control. Those that controlled the power and wealth still control it, and to them the world wars were just learning experiences. They now know how to accomplish their goals and they are now rapidly doing it.

Other than for a few show cases for the media, very few war criminals were ever arrested or tried after the war. The most obvious ones fled to havens overseas, usually with the assistance of the Vatican, and often even with the help of the U.S. government itself (e.g. rocket science).

But the vast majority of the Nazis, and the power behind them, remained untouched. The Allies had left the denazification of Germany to Germany itself, and as post-war Germany rebuilt, its towns needed mayors and councillors, its industries needed directors, its schools needed educators, and who better to fill these rolls than the people that had already been doing it?

Tomorrow The World (unsubstantiated predictions)

So, what happens when the next oil shortage or other crisis finally breaks the camel's back and the U.S. comes tumbling down in a mixed metaphoric disaster?

The Federal government has very little direct influence on the running of the country, so it's not hard to imagine the Federal government effectively folding (no one ever trusted it anyway) with individual states retaining control, or even with city states starting up. But generally there would be major chaos, and massive disruption of services, not to mention widespread rioting, destruction, and death, especially in the more urban areas.

And then it's not hard to imagine the need for Europe to send in peace-keeping troops to restore order, especially when one realizes that Europe would need to do something to protect its own interests (remember those trillions of dollars in investments in U.S. assets?). And they would do it with the full support of other nations (e.g. Japan would want its businesses protected, and the Islamic world would welcome anything that goes against the U.S.).

And of course it would be necessary to declare martial law, to suspend individual rights, etc. in order to control the situation. But fortunately the country is full of prisons (remember the extremely high imprisonment rate?). Many (maybe most) of those prisons are actually run by private companies, most of which would be more than happy to run them for the new authorities with the new batch of prisoners.

Ten Years Later

This article was followed up, ten years later, by Economic Expansion.