The United States continues to reap major gains from what Charles de Gaulle called its "exorbitant privilege," its unique role in providing global liquidity by running chronic external imbalances. The resulting inflow of productivity-enhancing capital has strengthened its underlying economic position. Only one development could upset this optimistic prognosis: an end to the technological dynamism, openness to trade, and flexibility that have powered the U.S. economy. The biggest threat to U.S. hegemony, accordingly, stems not from the sentiments of foreign investors, but from protectionism and isolationism at home.
---The Overstretch Myth By David H. Levey and
Stuart S. Brown
Friday, February 25, 2005
Milt's file on the Overstretch Myth
Milt posted this today from Foreign Affairs. He says it's important and Milt's almost always right in my book. Here's the closing paragraph,