MSN wrote: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?
I agree that the other countries are starting to become a bit more dominant in some 'areas' (technology for example) but this makes me feel skeptical.