In 1988 the United States reached the zenith of its fifth wave of declinism since the 1950s. The roots of this phenomenon lie in the political economy literature of the early 1980s that analyzed the fading American economic hegemony and attempted to identify the consequences of its disappearance. These themes were picked up in more popular and policy-oriented writings, and the combination of the budget and trade deficits plus the October 1987 stock market crash produced the environment for the spectacular success of Paul Kennedy’s scholarly historical analysis in early 1988. Decline has been on everyone’s mind, and the arguments of the declinists have stimulated lively public debate.
Although predominantly of a liberal-leftist hue, declinist writings reflect varying political philosophies and make many different claims. In general, however, they offer three core propositions.
First, the United States is declining economically compared to other market economy countries, most notably Japan but also Europe and the newly industrializing countries. The declinists focus on economic performance and on scientific, technological and educational factors presumably related to economic performance.
Second, economic power is the central element of a nation’s strength, and hence a decline in economic power eventually affects the other dimensions of national power.
Third, the relative economic decline of the United States is caused primarily by its spending too much for military purposes, which in turn is the result, in Kennedy’s phrase, of "imperial overstretch," of attempting to maintain commitments abroad that the country can no longer afford. In this respect,