7.9 - Challenges and uncertain futures for superpowers

Economic restructuring and social costs

An economy can remain globally powerful while some of its industries, places and households experience decline.

Economic restructuring changes the mix and location of economic activity: for example, manufacturing employment may fall as automation, import competition and relocation alter production, while services or advanced technology expand. A country can gain productivity and new export sectors but lose jobs in older industrial regions. Workers' skills, housing and family ties may limit movement to places with new opportunities. Unemployment, lower tax revenue and pressure on local services can therefore persist alongside national growth.

The USA and EU illustrate the challenge of sustaining innovation and competitiveness while managing unequal adjustment. The EU is a union of states with different economies and fiscal arrangements, not a single state; a national debt ratio or unemployment rate should not be assumed to apply evenly across it. Ageing populations can increase pension and health costs and reduce labour-force growth unless productivity, migration or participation changes offset this.

Debt adds another constraint. Interest payments can compete with public investment, although borrowing can also finance productive infrastructure. Sustainability depends on interest rates, growth, currency arrangements, revenue and what the borrowing funded. A high debt ratio alone does not establish an imminent collapse.

The US Congressional Budget Office's March 2025 long-term outlook projected debt held by the public reaching 156% of GDP in 2055 under its stated current-law assumptions. It explicitly excluded later administrative or judicial actions beyond its cut-off dates. Use it as dated evidence of fiscal pressure under a baseline, not a fact about 2055 or an up-to-date assessment of every later policy. CBO 2025 outlook.

The costs of maintaining influence

Global capabilities require continuing spending, not only the initial purchase of equipment.

Naval power needs ships, ports, crews, fuel and maintenance; air power needs aircraft, bases, training and logistics. Nuclear deterrence needs secure systems and long-term maintenance, while intelligence requires specialist people, surveillance and cyber capabilities. Global deployment adds the cost of protecting supply lines and sustaining distant operations. Space exploration and satellite systems can support communications, navigation, science and prestige, but also compete for public funding.

SIPRI estimated 2024 US military expenditure at US$997 billion, compared with an estimated US$314 billion for China. These are dated current-dollar estimates, not direct measurements of combat effectiveness. Different wages, procurement prices, accounting and exchange rates complicate comparison. SIPRI's military category should not be assumed to include every intelligence or civilian space budget. SIPRI 2024 expenditure study, published April 2025.

Supporters argue that deterrence, secure routes, research spillovers and alliances justify spending. Critics may prioritise housing, health, infrastructure or climate adaptation, particularly during fiscal pressure. The trade-off is conditional: cutting military spending does not guarantee that savings will go to any one service. Nor does a large budget guarantee successful intervention.