The United States after unipolarity: the American economy and America’s global power

America’s economic strength has long underwritten its leading role in world affairs. The buoyant tax revenues generated by economic growth fund its massive military spending, the foundation of its global hard power. America’s economic success is also fundamental to its soft power and the promotion of its free-market values in the international economy. Finally, prosperity generally makes the American public more willing to support an expansive foreign policy on the world stage, whereas economic problems tend to engender popular introspection. Ronald Reagan understood that a healthy economy was a prerequisite for American power when he became president amid conditions of runaway inflation and recession. As he put it in his memoirs, ‘In 1981, no problem the country faced was more serious than the economic crisis – not even the need to modernise our armed forces – because without a recovery, we couldn’t afford to do the things necessary to make the country strong again or make a serious effort to reduce the dangers of nuclear war. Nor could America regain confidence in itself and stand tall once again. Nothing was possible unless we made the economy sound again’.