Today’s media are full of news about economic decline. Journalists and respected economists say we are in, as New York Times columnist Paul Krugman recently put it, "the worst financial crisis since the Great Depression" ("Bankers Without a Clue," January 14, 2010).
     Since the recession began in December 2007, more than 7.2 million workers in the United States have lost jobs (Bloomberg News, January 21, 2010). Stocks took a fall from which they have not yet recovered; the Standard & Poor’s 500 stock index reached a low of 666.69 in March 2009—less than half of its October 2007 high value. Yet stocks have begun to rise from their lows, and some economists are saying that the recession technically ended in late 2009.
     So, what is going on? Has the U.S. economy begun to recover? Or are troubling trends still in place, revealing underlying problems in an economy on the road to collapse? As China and Europe gain economic strength, what will happen to the U.S. as a global financial powerhouse? Are America’s days of prominence near their end? And what will this mean for the rest of the world?

How Did We Get Here?

     To understand the future, we must first look at the past. Most people now take for granted the power and influence of the U.S. and British-descended nations on the world economy. But it was not always so. How, then, did the English-speaking peoples become the world’s wealthiest nations—and what does Scripture indicate will be the ultimate destiny of these nations’ economies?
     Before the year 1800, the United Kingdom was just one of many nations vying for influence on the world stage. Britain had lost its 13 colonies on the east coast of North America, and was heavily in debt. Spain’s empire had more territory than Britain’s. In Europe, France was on the verge of gaining hegemony.
     Yet, in just a very short time beginning around 1800, the tides turned, and the greatest world empire in history virtually "fell into the lap" of Great Britain. At its largest extent, about one-fourth of the world’s land surface—and a similar proportion of the world’s population—was ruled by the British Empire.
     Almost simultaneously, the Industrial Revolution began in Great Britain, giving the nation the wealth, resources and tools to become the dominant world power throughout the 19th century, and well into the 20th. At its peak, the British Empire possessed almost all the world’s important sea gates, except for those controlled by the United States. What had for centuries been just a tiny island nation became not only the world’s most powerful and influential—but also its wealthiest. London, its capital city, became the financial and trading capital of the world.
     But even as Britain rose to world prominence, its former American colonies were burgeoning into a great power. The 19th century saw the United States spanning across North America, building economic and military strength, and by World War I challenging Europe as a center of world power. By the end of World War II, the U.S. was producing more manufactured goods than all other nations combined. Its dollar was the world’s premier reserve currency, was backed by gold, and was in strong demand. The U.S. Treasury held more than 60 percent of the world’s currency reserves, and 65 percent of the world’s gold reserves.
     After WWII, the U.S. and Britain together dominated the world in virtually every important measure of wealth and productivity. Economic activity in the U.S. was thriving, unemployment was low, the savings rate was positive, personal income was rising, inflation was under control, interest rates were moderate and the balance of trade had huge surpluses.
     How did this happen? Was it because of the genius of the American and British peoples? Or was there some other factor that led to the astonishing rise of these two brother nations to a level of power and wealth unprecedented in the world’s history? God chose the Israelites to be a "people for Himself," not because they were the greatest—in number, or in any other way—but because He loved them, and "because He would keep the oath which He swore" to the patriarchs Abraham, Isaac and Jacob (Deuteronomy 7:6–8).
     God had promised Abraham that he would be the father of many exceedingly fruitful nations (Genesis 17:4, 6). Abraham obeyed God, and this blessing was passed on through his son Isaac (Genesis 26:5). The blessing was then passed on to Isaac’s son Jacob (also called Israel). Jacob’s descendants were to "spread abroad" in every direction, as widely as the "dust of the earth" (Genesis 28:13–14). In effect, Abraham’s descendants were to inherit the earth (Romans 4:13). That is, they would be given dominant influence and a choice share (cf. Deuteronomy 32:10–14). This blessing was passed on to Joseph’s two sons, Ephraim and Manasseh, who together shared Joseph’s double portion (Genesis 48:15–16, 19–20, 22; 49:22–26).
     After God led Israel out of Egypt, He incorporated into the covenant at Mount Sinai the blessings He had promised to give Abraham’s descendants. God promised blessings for obedience (Deuteronomy 28:1–6, 8, 11–13). Yet He warned that if Israel persisted in disobedience, the nation would be punished "seven times" (Leviticus 26:14–25). A "time" in Bible prophecy is a year (compare Daniel 7:25; 12:7; Revelation 12:14, 17; 13:5, 7) of 360 days, and on the "day for a year" principle (Ezekiel 4:4–6), seven "times" could be a 2,520-year period of punishment—of deferring the promised blessings.

Blessings Deferred and Squandered

     Because of disobedience, ancient Israel fell into captivity in 721bc, and God "removed Israel out of His sight" (2 Kings 17:23). This means that it would be around 1800ad—2,520 years later—when God would keep His promise and give His favor once again to Israel, restoring the blessings of Abraham. What world-changing events happened at exactly that time? That is when Britain and the United States—the modern-day descendants of ancient Ephraim and Manasseh—gained ascendancy and world dominance in terms of power and prosperity so quickly.
     However, God warned the Israelites not to forget Him in their time of prosperity (Deuteronomy 8:10–20). He warned that if they disobeyed Him, He would remove His blessings from them (Deuteronomy 28:15–20, 43–53, 63, 68).
     How has the U.S. handled God’s blessings? Once the world’s greatest creditor nation, the U.S. since World War II has become the world’s largest debtor. No longer the world’s top exporter of goods and services, the U.S. has for years run persistent trade deficits. Both Germany and China now export more manufactured goods than the United States. The combined merchandise exports of just three of the leading EU countries—Germany, France and Italy—are more than double the merchandise exports of the United States. The U.S. trade deficit in 2006 was more than $817 billion. As analyst Craig Harrington observed, "No other country in history has had a trade deficit as large as the U.S. as a percentage of GDP or in total dollar terms without sufering a major collapse" ("Examining the Trade Deficit," December 10, 2009, www.economyincrisis.org).
     The U.S. current account deficit in 2007 was by far the greatest of any nation on earth, at a staggering $747 billion. China, by contrast, had a current account surplus of more than $363 billion. The U.S. has in recent years often had a negative savings rate, which means spending more than is earned. For a couple of decades now, U.S. economic expansion has been based on an unsustainable cycle of borrowing and spending on consumer goods. America’s foreign currency reserves have shrunk from 60 percent to about 1 percent of world reserves—behind Libya, Poland and Turkey. The U.S. has accumulated more than $12 trillion in national debt (more than $39,000 for each citizen), with about $2 trillion added just in 2009. Also, U.S. debtors owe nearly $1 trillion in credit card debt, and about $14 trillion in debt owed to other countries. Together, the U.S. and Britain owe about 40 percent of the total external debt of all the world’s nations. The U.S. also holds huge unfunded liabilities, including Social Security and Medicare, estimated by various sources from about $55 trillion to more than $106 trillion. Should a health care reform bill pass the House of Representatives and Senate, those liabilities would almost certainly skyrocket even higher!
     One consequence of such massive debt is that foreign holders of dollars are increasingly using them to buy American companies and real estate, or dumping them in favor of gold or other assets seen as more reliable. As God warned, Americans are quickly becoming the "tail," even within their own borders, while other nations are gaining economic power and influence in their place. "The alien who is among you shall rise higher and higher above you, and you shall come down lower and lower. He shall lend to you, but you shall not lend to him; he shall be the head, and you shall be the tail" (Deuteronomy 28:43–44). Foolish economic policy will drive home the ancient principle that, "The rich rules over the poor, and the borrower is servant to the lender" (Proverbs 22:7).
     Analyst Harrington wrote: "In the ten years to 2004, the proportion of U.S. corporate equities owned by foreigners increased from 6 percent to 12 percent. In the case of U.S. corporate bonds the proportion increased from 12 percent to 24 percent, and in the case of U.S. Treasury bonds from 18 percent to 43 percent. As if all this was not alarming enough, here is a further fact to consider: in the case of many of their corporate investments, foreigners have clearly been intent on gaining global control of key ‘chokepoint’ technologies, such as those needed to produce advanced weapons, airplanes, and computers" ("Examining the Trade Deficit," December 10, 2009, www.economyincrisis.org).
     In early 2007, investment advisor Peter D. Schiff published a book (Crash Proof: The Coming Economic Collapse) in which he predicted the collapse of the subprime mortgage market, and predicted that the collapse would spread to the general mortgage market and then become an economy-wide credit crisis. That is exactly what happened in 2008.
     In a more recent book, the same author says that the borrow-and-spend economy cannot be sustained, and that the U.S. may well be headed eventually for hyperinflation and economic collapse. He compares the U.S. economy to a "house of cards"—an economy built on a "phony foundation of debt-financed consumption" (The Little Book of Bull Moves in Bear Markets, pp. xxxiii–xxxiv). Sooner or later, he says, nations will have to return to "saving and producing rather than borrowing and consuming" (ibid., p. 20). The book of Haggai shows what happens when people neglect to do God’s will. "You have sown much, and bring in little; you eat, but do not have enough; you drink, but you are not filled with drink; you clothe yourselves, but no one is warm; and he who earns wages, earns wages to put into a bag with holes" (Haggai 1:6). Along with many other investment advisers and observers of our unsound economic policies, Schiff warns of massive inflation, as the government desperately seeks to stave off the inevitable by ever expanding the money supply and thus inflating (and thus debasing) the currency. "The U.S. dollar will continue to lose purchasing power as expansionist monetary policy, in a futile effort to revive our consumer-based economy, creates additional inflation.… the dollar is on a clear path toward collapse" (ibid., pp. xxiv–xxv). He, like some other investment advisors, recommends preserving wealth by buying gold, commodities and certain kinds of stocks.

What Happens Next?

     As we head down a path toward economic catastrophe, there is no indication that we are changing to a more responsible mode of conduct. Indeed, as Schiff predicted, our government is heedlessly and recklessly spending, borrowing and printing money at a more prodigious rate than ever. And certainly there is no indication that we are about to repent of our sins as a nation. Moreover, foreign nations are not likely to sit by passively waiting for us to return to sound values.
     However, only God can reliably foretell the long-term future. God tells us that, unless we repent, our wealth will be taken away from us as plunder by our enemies. "Your wealth and your treasures I will give as plunder without price, because of all your sins, throughout your territories. And I will make you cross over with your enemies into a land which you do not know; for a fire is kindled in My anger, which shall burn upon you" (Jeremiah 15:13–14). And: "I will give as plunder your wealth, all your treasures, and your high places of sin within all your borders. And you, even yourself, shall let go of your heritage which I gave you; and I will cause you to serve your enemies in the land which you do not know; for you have kindled a fire in My anger which shall burn forever" (Jeremiah 17:3–4). Though these words were written specifically to ancient Judah, they also apply to the modern-day descendants of Judah and the House of Israel (Jeremiah 2:14–15)—including the American and British-descended nations (see our booklet, The United States and Great Britain in Prophecy).
     The Bible tells of the rise of a new economic superpower—a power that exists today in nascent form. Many Americans do not realize that, already, just three of the leading EU nations together export more than twice the goods exported by the United States. Scripture reveals that, for a brief time at the end of this age, an economic powerhouse Europe will dominate the world’s commerce. This "Beast" will have authority for a time over "every tribe, tongue, and nation" (Revelation 13:7). What else do we learn about this Beast? "He causes all, both small and great, rich and poor, free and slave, to receive a mark on their right hand or on their foreheads, and that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name" (Revelation 13:16–17; 18:3, 11–19). To learn more about this amazing prophetic time, request your free copy of our powerful booklet, The Beast of Revelation: Myth, Metaphor or Soon-Coming Reality? by contacting the Regional Office nearest you (listed on page 30 of this magazine) or ordering online at www.tomorrowsworld.org.
     Already, European leaders are calling for a new economic order that will require the U.S. and Britain to give up the international power and influence they have enjoyed for more than 200 years. God will allow the modern-day descendants of Ephraim and Manasseh to again learn their lessons through a time of national captivity. Ultimately, all nations will be humbled before God (Isaiah 2:5–7, 10–11, 19–21). Money will not save them (Proverbs 11:4). However, He will ultimately save the nations from the depths of calamity (Jeremiah 30:4–20). The blessings of Abraham will be restored to the modern descendants of ancient Israel (Isaiah 60:1, 5–6, 11, 17–22), and the whole world will prosper under the loving Millennial reign of Jesus Christ.
     We do not know exactly how long it will take this scenario to play out. The final economic collapse may not occur quite as soon as some expect. But all the evidence shows that we are headed for collapse—unless our nations drastically change their ways. Bible prophecy shows that Europe and the Asian nations will become more and more prosperous, and the U.S. will become less and less so. Eventually, a new economic superpower will fully emerge, and will actually take the peoples of the U.S. into national slavery—a punishment that will not end until the second coming of Jesus Christ, when economic prosperity, peace and God’s whole way of life will be restored to planet Earth, and eventually all the earth will rejoice (Psalm 14:7; 96:10–13; 97:1; 98:3–4).