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Reports of America's decline are greatly exaggerated

Here are six reasons why US economic clout will endure.

By Steve Yetiv / March 12, 2009

Norfolk, Va.

Is America really in serious decline?

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Hardly a day goes by that I don't hear someone say so. Even President Obama captured this anxiety in his inaugural speech, pointing to a "nagging fear" that America's "decline is inevitable."

Of course, America's problems – from banking and debt crises to foreign security threats – are very serious. But, as bad as things are, here are six reasons why America's starring role on the world stage isn't over.

1.The United States still has the most competitive economy in the world. Despite the recession, the US still has the greatest potential for cutting-edge economic growth. It ranks atop the World Economic Forum's latest global competitiveness study. And its companies remain the best.

According to the most recent Fortune Global 500 report, the US hosts more of the world's major companies (153, to be exact) than any other country. Even Japan lags way behind with just 64, while China is home to a meager 29.

The percentage of US companies in the Global 500 has averaged about 30 percent for most of the years from 1992 to 2008. That doesn’t suggest decline. [Editor's note: The original version included an inaccurate percentage of US companies that make up the 2008 Fortune Global 500 report. Accidentally, the author's revision was not implemented.]

2. The US is still a major international power broker. It continues to lead organizations that it spearheaded at the end of World War II: the International Monetary Fund, the World Bank, and the World Trade Organization. And that critical role enables it to capitalize on globalization better than can most major countries.

3. The US military is without parallel. To be sure, it has been stretched thin by the wars in Iraq and Afghanistan. But it remains the strongest fighting force in the world.

As just one indicator of its high-tech advantage, it has mastered stealth flight, while the Russians and Chinese are still in the theoretical planning stages for such technology – far behind America.