Thanks, charts are fixed. For full interactive chart, see the FT: http://www.ft.com/intl/cms/s/2/0a35504a-0615-11e1...

Thanks

From Marvin Zonis:

There are many different indicators, speeches by Khamene'i and Ahmadinejad who see US policy as aimed at regime change rather than Iran's nuclear program. But here's a piece that lays it all out pretty well from the thoughtful Iranian point of view. Marvin Zonis http://www.presstv.ir/detail/219635.html

A comment sent in by a reader:

Interesting post! A few notes.

(1). The author of blogpost 2, Dalal, is an engineer, not an economist. So his expression of these problems is often technically incorrect. But that does not mean the problems are not real.

(2). For manufacturing in his article substitute trade. Current account deficit, Triffen Dilemma, impossible trinity -- a difficult trap to escape. Exports remain strong, but imports are not. The approach of peak oil (highly likely during the next decade) will exacerbate the problem, as would the decline in production of coal from the Applachian mines (coal production peaking cannot be reliably forecast, but prices are rising as the world taps lower quality reserves).

(3). Expenditures on the US military and foreign intelligence are roughly $1T/year, aprox the size of the Federal deficit. And largely unrelated to any actual threats, hence not a source of national advantage or competitiveness. The most recent DoD strategy documents focus on al Qaeda as the primary foreign threat. Not only is almost the entire US military apparatus irrelevant to such a threat, public information provides no basis to believe that AQ any longer exists as an effective force (dismantled by global police, security, and inelligence services since 9-11).

(4). Health care

The cost structure of US health care is a serious competitive disadvantage, on several levels. Showing any kind of substantial relative advantage seems unlikely, IMO.

Higher costs seem more likely to lead to a services deficit than net exports, as both processing (radiology sent to India) and end demand ("medical tourism") flow elsewhere.

Massive internal subsidies and higher costs drive medical device and drug exports, but funding cuts might slow both of these. Many studies show that aprox 80% of global medical drug/device industry profits are from the US, another of the many unsustainable imbalances which may signal the end of the post-WwIi global regime.

(5). I agree that describing these problems in emotional, even apocalyptic, terms is both foolish and pointless. But neither should we be blind to their consequences. The UK suffered in many ways during it's post-imperial adjustment from 1918- 1980. As Keynes said, just because they came through the storm does not mean that storms are not painful.

(6). Shifting to speculation, I suspect that objectively the US has fewer serious problems than the other great powers. Rather, its most serious problem is a dysfunctional political system. Unfortunately, history suggests that these can be difficult to reform and cause serious difficulties. The English civil war and Japan's WW2 involvement are sobering examples.

Yes, it will remain free.