About the first decade of what was to be the Second American Century, the pessimists have been proven right.
According to the International Monetary Fund, the United States began the century producing 32 percent of the world's gross domestic product. We ended the decade producing 24 percent. No nation in modern history, save for the late Soviet Union, has seen so precipitous a decline in relative power in a single decade.
The United States began the century with a budget surplus. We ended with a deficit of 10 percent of gross domestic product, which will be repeated in 2010. Where the economy was at full employment in 2000, 10 percent of the labor force is out of work today and another 7 percent is underemployed or has given up looking for a job.
Between one-fourth and one-third of all U.S. manufacturing jobs have disappeared in 10 years, the fruits of a free-trade ideology that has proven anything but free for this country. Our future is being outsourced -- to China.
While the median income of American families was stagnant, the national debt doubled.
The dollar lost half its value against the euro. Once the most self-sufficient republic in history, which produced 96 percent of all it consumed, the U.S.A. is almost as dependent on foreign nations today for manufactured goods, and the loans to pay for them, as we were in the early years of the republic.
What the British were to us then, China is today.
Beijing holds the mortgage and grows impatient as we endlessly borrow on equity and refuse to begin paying it down. The possibility exists of an eventual run on the dollar or even a U.S. debt default.
Who did this to us? We did it to ourselves.
We sold ourselves a lot of snake oil about the Global Economy, interdependence, free trade and "it doesn't make any difference where goods are produced." The George W. Bush Republicans ran up the deficit with tax cuts, two wars and a splurge in social spending to rival the guns-and-butter of the Great Society.
Abandoning its role as the fellow who comes and takes away the punch bowl when the party's getting good, the Fed kept the money flowing fast and free, creating the tech bubble that burst in Y2K and the stock and housing bubble that burst at decade's end.
To pull us back from the cliff's edge, over which we were headed a year ago, the Fed doubled the money supply, while the administration ran up deficit spending to the highest level since World War II.
Unlike World War II, however, there is no end in sight to these deficits.