The Decline That Never Happened: America's Economic Position Strengthens While Allies Falter
Analysis - For over a decade, predictions of American decline have dominated economic discourse. Political polarization, institutional strain, and domestic crises have fueled assumptions that US global power is fading. Yet comprehensive economic data tells a dramatically different story: American economic dominance hasn't weakened—it has actually strengthened relative to wealthy democratic allies and rivals alike.
The numbers reveal an uncomfortable truth for those predicting America's eclipse: while the United States maintains its position, its closest allies are falling behind at an accelerating pace.
The GDP Reality Check: Stability Versus Collapse
In 1990, the United States represented approximately 26% of global gross domestic product. More than three decades later, after repeated predictions that China would inevitably overtake America, the US GDP growth comparison shows remarkable consistency: the US share remains virtually unchanged at 25.9% of global output, with total GDP reaching an estimated $30.62 trillion in 2025.
This stability becomes more impressive when considering the global economy has expanded massively since the Cold War ended. America hasn't just held its position—it has maintained its share of a far larger pie.
The G7's Shocking Contraction
The contrast with America's G7 allies reveals a G7 economic decline that few anticipated. When the Cold War ended, Britain, France, Italy, Japan, and Canada together represented around 32% of global GDP. Today, that combined share has plummeted to below 14%.
This relative contraction reflects weaker productivity growth, demographic pressures, and prolonged underinvestment, particularly across Europe and Japan. The divergence isn't marginal—it represents a fundamental reshaping of economic power within the Western alliance.
When Mississippi Outperforms Major Economies
The granularity of the data makes the gap even starker. Mississippi, America's poorest state by GDP per capita, now outperforms four G7 countries on the same measure. West Virginia, with the second-lowest per capita GDP among US states, surpasses all six non-US G7 members.
Since 2020 alone, US GDP per capita has risen by approximately $20,000—a gain no other G7 economy has matched even over much longer periods. This isn't just about America doing well; it's about the rest of the developed West struggling to keep pace.
The Productivity Chasm Widens
US productivity advantage has been the decisive factor in this widening gap. The United States has outpaced the rest of the G7 in productivity growth through technology adoption, capital depth, and labor mobility—advantages that compound over time.
Mario Draghi's 2024 report on European competitiveness, commissioned by the European Commission, formally acknowledged what the data already showed: Europe is losing ground to both the US and China in productivity, innovation, and technological scale. Without fundamental reforms, Draghi warned the continent faces a "slow agony" of weaker growth and declining global influence.
Wealth Concentration Tells the Same Story
Private wealth accumulation reinforces the pattern. According to Altrata's World Ultra Wealth Report 2025, the United States now houses 38% of the world's ultra-high-net-worth population (individuals worth over $30 million)—more than the next ten countries combined.
In absolute terms, 192,470 Americans control approximately $22.3 trillion in private wealth. The pace is accelerating: ultra-wealthy Americans increased by 21% in the past year alone. China, the nearest competitor, holds about $5.9 trillion across 54,020 individuals—roughly one-quarter of the US total.
America's billionaire dominance:
- 1,135 American billionaires with combined wealth exceeding $13 trillion
- All five of the world's richest individuals are American tech founders
- New billionaires emerge faster than existing ones drop below the threshold
Why Europe and Asia Can't Keep Up
Wealth creation elsewhere faces structural constraints. China's ultra-wealth growth is slowing under tighter state control and trade restrictions. Europe crossed 1,000 billionaires for the first time but remains more cautious, with less tolerance for the volatility that characterizes US capitalism.
That volatility—rapid technological change, market swings, aggressive capital reallocation—has proved central to American dynamism. Conditions that unsettle other economies allow the US to adapt quickly and generate new wealth at the top end.
The Paradox of American Strength
None of this negates America's genuine challenges. Income inequality remains the highest in the G7. The federal deficit closed fiscal 2025 at roughly $1.8 trillion. Healthcare costs remain structurally high. Infrastructure investment has lagged.
But measured against peers, the United States hasn't drifted into economic marginality—it has pulled further ahead while allies have struggled to adapt. Strong allies once amplified American power. Today, the imbalance runs the opposite direction.
What This Means Going Forward
Predictions of American decline focused on internal dysfunction have missed the comparative dimension. A country can have serious domestic problems while maintaining an economic position that remains, by global standards, unusually strong.
The question isn't whether America faces challenges—it clearly does. The question is whether those challenges matter more than the structural advantages that continue separating US economic performance from the rest of the developed world.
Current data suggests they don't. American economic dominance isn't a relic of the past—it's an accelerating reality of the present.
