The 'Age of America' is ending

China will surpass the US as the world's largest economy soon -- sooner than most people expected, according to an IMF report.

By Kim Peterson Apr 25, 2011 3:36PM
Image: American Eagle (© Steve Allen/Brandx Pictures/Photolibrary)The "Age of America" is ending in just five years.

That's according to forecasts from the International Monetary Fund, which has set 2016 as the year when China's economy officially surpasses that of America as the world's largest.

To put this into perspective, only 10 years ago the U.S. economy was three times the size of China's, according to Brett Arends at MarketWatch. We knew this was coming, but this is the first time the IMF has put an actual date on it. "Most people aren’t prepared for this," Arends writes. "They aren’t even aware it’s that close."

The Daily Mail puts it starkly: "Whoever wins the 2012 presidential election will have the dubious honour of presiding over the fall of the United States." Even at its peak, Japan only had half of America's economic output, the Mail adds, and the USSR produced only a third.

If you look solely at the gross domestic output of the U.S. and China using current exchange rates, you wouldn't see this coming, Arends writes. That's because China works hard to undervalue its currency.

The IMF analyzed something different: "Purchasing power parity." Or, the amount people earn and spend in their economies.

Using this yardstick, China's economy is set to zoom from $11.2 trillion this year to $19 trillion in 2016, Arends writes. The U.S. economy will rise as well in that period, but only from $15.2 trillion to $18.8 trillion.

And the U.S. portion of the world economy drops to 17.7%, which Arends writes is the lowest in modern times.

The Telegraph notes that the IMF report comes a few days after Standard & Poor's sounded a warning shot over America's debt status. The U.S. federal debt has hit World War II levels, and Medicare, Medicaid and other entitlement liabilities are five times the annual GDP.

"It is premature to write off America as the world’s dominant superpower, for this is a nation that possesses an extraordinary ability to rebuild itself after periods of decline," writes Nile Gardiner. "It remains a beacon of hope to billions across the world, a 'shining city upon a hill' built on the ideals of liberty and freedom, as Reagan reminded the American people before he left office."

So what's next? Will India and its gangbuster economy eventually pass the U.S. for second place? Will the U.S. dollar be replaced as the world's dominant reserve currency?

399Comments
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2016 is a bit late most Chinese are talking about 2014 being the date of Chinese superiority.

We can blame Paulson, Bernanke and Geithner along with Reagan,Bush Sr,Clinton,Bush Jr and Obama for tearing down the US economy.

Why anyone would let their industry go over to their enemy and pay for the shipping and set up costs like America did will go down in the history books as the most stupid thing any country did in the world. 

We should ban all trade with China right now and drain the Wall Street banks of all their money and build manufacturing plants right here in America and rebuild our position in the world.

We are in the dust bin of history and need real leaders today not tomorrow to undo the damage that several years of down hill voodoo economics have done to this country.
Apr 25, 2011 4:13PM
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I would personally love it if America was no longer the world's "superpower".  Let someone else be responsible for bailing out all the 3rd world countries that can't take care of themselves.  Let someone else police all the world's tyrants for a few trillion dollars a year.  All being the world's superpower has done for us, is cost us a fortune in cash and American lives.  Let someone else have all the fun.
Apr 25, 2011 4:44PM
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And all you blind idiots that want to blame this President or that President are dumb as hammers. Big business has owned the United States government for at least a generation so it does not matter one bit who was in office. As long as there is lobbying (legal bribery) and undisclosed, or uncontrolled, campaign contributions then the American middle class has no chance. The disgusting foxes are in charge of the hen house and until there is MAJOR political overhauling of the system as it is we, the people, are royally f**cked.
Apr 25, 2011 4:32PM
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oh, I forgot - when the dollar is worthless - the Chinese and the Hindus will have no one to sell to. So don't worry they are going to go down as well - that is the general way how economies work - usueless people producing useless things that other useless people need to buy! For me, I am fine with all that I have - I don't need to text on a phone, I need to just make calls, my computers are fast enough, cars well I have a Hummer 3 - and it is GREEN - since the president said "we need to go GREEN", so I bought a green colored one - opps, everything he talks about is color anyway - did I make a mistake? Well, when people like me drop out of the economy beclause they really only need essentials now, how do you entice people to buy the latest non-essential gadgets? Food, shelter, clothing and fuel - that is all that is needed.
Apr 25, 2011 5:27PM
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The sad things is that while there are people like us posting about this and how the economy needs to be fixed, the mass majority of the population doesn't care.  They will be sitting in front of their T.V.'s watching a "Prince" from another country (that has nothing to do with anything) get married.  The biggest problem here is that there are no priorities.  The people care about Hollywood and dreams.  Reality is now and it is here.  Too bad this will never find its way to those people.  An article about a thief actress will get more hits than this one.
Apr 25, 2011 5:21PM
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This is to the guy that commented about sharing Americas wealth with other countries, like our neighbors Mexico.....just a little FYI,...the poor migrants are the ones draining America,...they collect welfare, medicare, food stamps, housing subsidies, free school lunches, as matter of fact everything free,,... just because they had a baby in US , this gives them benefits for the kids and the mother as the care taker. While the fathers stand on the corner and make tax free money,..without putting a cent of back into americas system to renew. Its draining, that's why California is bankrupt and many other states to follow. Plus I have seen here in Virginia, they send 100's and 1000's america dollars back to mexico, Which means they can support people there in Mexico and their families here in America,...how many american do you know that can support  two different homes. Most American do not qualify for free medical ins,....but illegal's do,...go figure. This IS NOT racial,..its a fact,...I am not saying that's is the only and main reason, but it has a hugh burden on America and its people that work hard for their money and have to pay for all these expenses, its scary,..my sister makes 13 dollars a hour and owes taxes every year,,,..why, so she can pay for illegal's to have multiple babies they can not afford.  NOTE: you do not have to be legal to collect welfare.

 I can see over population and a lot more poor americans in the future,...its just a matter of time. Hello Third World Country. Note again, I love all people, but I hate when people take advantage. They need to pay taxes, and I really hate to say this too, but they have to many kids, sorry but its a fact, rich people don't even have kids like that and they can afford them.
Apr 25, 2011 4:47PM
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Okay, look at it this way. US will have 18.8 trillion and has a population of just over 300 million. Meanwhile China has a population of 1.33 billion and will have an economy of 19 trillion. Way to Go China! 4 x our population and you still sucking wind. 5 people w/ 10 bucks & 50 people w/ 1 dollar. Who has the better lifestyle.
Apr 25, 2011 5:15PM
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It is not about China. They are trying their best, it is about us. We are the number one user of illegal drugs and we spend money abroad to stop the trade instead of just stop using them: double winner. Our kids drop out of school and parents go to work to have a bigger home instead of spending time with your kids: double winner. We send our kids to stupid wars, spend our money getting them kill or mentally sick, let's keep our kids home and save money: double winner. I saw the enemy and it was us!
Apr 25, 2011 4:39PM
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Big business sold out America just to fatten their wallets. They wanted a global economy so all those non-consumers that used to grow rice and raise goats to live are now working in factories, making more money than they ever dreamed of, even though they don't realize that they are being used, and now America is going to have to suck wind for awhile. Eventually those ex rice growers and goat herders are going to want better wages while still manufacturing the crap they make then American industry will again rise from the ashes to manufacture the quality products that we are known to make. The wealthy and big business can suck my ... 
Apr 25, 2011 5:27PM
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TAKE OUR ECONOMY BACK....VOTE WITH YOUR FEET AND YOUR WALLET.

BUY .....MADE IN AMERICA OR DON'T BUY IT.........

UNITED WE STAND, DIVIDED WE FALL....Don't let politicians and bankers divie us.

SAY NO TO ANYTHING NOT MADE IN AMERICA.............

START TODAY...before you loose all your fore fathers fought so hard for, encourage your neighbor or start taking chinese language classes.

TIME TO PUT UP OR SHUT UP.  Stop shopping at WalMart....

 

 

Apr 25, 2011 6:24PM
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America has no one to blame but its government , and the  "people"  elected thease lying corrupt people to office. Then when they got caught with their hands in the cookie jar it is swept under the rug. America is corrupt. The government is only a reflection of the people it represents. HOW DID YOU LET MY COUNTRY COME TO THIS?
Apr 25, 2011 4:48PM
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I'm tired of the political blame game, of who spent more than the other.  It's only bolstered a competition of who can spend more than the other.  It's time to end this reckless self destructive spending in Washington, before we slide into third world status, which is the direction we're headed.  $14 trillion must be the absolute limit, and we must begin to reverse the mounting debt.  We can't afford it.  No more healthcare bill, no more entitlements gone wild, no more world police.  Spending must end.

And it's also time to start exploiting our natural resources, like oil, gas, and rare earths.  Production needs to increase drastically.
Apr 25, 2011 5:15PM
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We all knew this was coming. It is part fault of the politicians and the greedy private sector that exports all this jobs to China (a communist country by the way) just to save a buck.  And what the chinese do they copy all the american technology without having to do any research.  They are even building cars and sending rockets to space.  Everything you buy these days is made in china (crappy stuff with american brand names).  We let these greedy people take all these jobs over there because they rather pay an employee $3 a to day to build a bad, bad product, than to pay an american $15 to make a better quality product.  All the politicians have allowed this because most of them are in some sort of business making a killing and at the same time killing our country. 
Apr 25, 2011 6:24PM
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Maybe China and all the up and coming developing nations should be paying their way instead of the US paying 1/4 of US money to the UN. Look it up, China pays hardly nothing since she is still considered a developing nation. Politics at work on a Global scale. Bankrupt the US. Sent jobs overseas to help their economies while ours tanks. You know spread the wealth. We need to bring jobs and money back to US. Get out of UN.
Apr 25, 2011 5:10PM
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This is sad, I agree with some of you, but the US did to itself, it started years ago when we closed down our steel mills, sending the jobs overseas...coz IT WAS CHEAPER. We want CHEAP CRAP and thats what we get. You cant hardly find MADE IN AMERICA anymore. When we decide and only when that weve had enough of this crap, will it end. Bring back the mills and textiles and all the other jobs weve sent over seas and to mexico and south america. Will the cost be great? YES! But we will have US jobs back and our DEPENDENCY on these countries will end. It should have never gotten to this in the first place. The US needs to wake up and stop trying to be everyones friend and take care of our own.

Apr 25, 2011 4:25PM
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well, this has happened before with "super powers" - Imperial Rome lost its export and industrial advantage by the end of the first century A.D. - but this was an agrarian based economy and it took another 125 years for the economy to collapse after substantial debasemen of its currency - to worthlessness. Of course taxes only increased - the burden of government eventually broke all classes.

 

So yes let some one else police the world - petty tyrants, threats, global economic warfare based on state subsidies, etc. On a fast track - thr end of the third quarter of this century will be a mess, if not sooner, but hell I will be dead and the ones that caused this will be as well. Nice future ehhh? The Fat Lady has been singing for some time but no one listens certainly not the paralyzed "intellectuals" of this administration.

 

Happy Days!?

Apr 25, 2011 7:43PM
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I will gladly buy American if you can tell me what we make....everything has been shipped overseas.

Apr 25, 2011 7:41PM
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I like how no one is mentioning that China's economy is American made. I guess it's not patriotic to tell the truth about where all of our manufacturing jobs went the last 11 years. You know the jobs that paid too much, so out to China and their slave labor they went. Oh well, at least the CEO got his bonus, that is all that matters anyway, Right. Scorched Earth Capitalism at it's best.
Apr 25, 2011 7:14PM
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The only way the USA can recover from the mess we are currently in, is very simple. Not simple to fix but simple to understand. Our government needs to get the hell out of the way and let the American people do their thing. Until we bring back manufacturing to this country, we will not be a factor...It's simple....we don't make anything anymore. We have become lazy and expectant. Somehow we feel someone owes us something...ENTITLEM​ENT SOCIETY...CHANGE IT OR LOOSE IT!!!!
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