Is U.S. losing its edge? Are we concerned about it?

Americans have replaced Britons atop the world, and we are now worried that history is happening to us, writes Newsweek international editor Fareed Zakaria in an essay, part of a package on Global Leadership - the latest installment of Newsweek's "Leadership for the 21st Century" series. History has arrived in the form of "three billion new capitalists," as Clyde Prestowitz's recent book puts it, people from countries like China, India and the former Soviet Union, which all at once scorned the global market economy but are now enthusiastic and increasingly sophisticated participants in it. And it's not just writers like Prestowitz who are sounding alarms. Intel's co-founder Andy Grove is blunt: "America ... [is going] down the tubes," he tells Newsweek in the June 12 issue (on newsstands Monday, June 5), "and the worst part is nobody knows it. They're all in denial, patting themselves on the back as the Titanic heads for the iceberg full speed ahead."

The United States has a history of worrying that it is losing its edge. This is at least the fourth wave of such concerns since 1945. The concerns in each one of these previous cases was well-founded, the projections intelligent. But the reason that none of the earlier scenarios came to pass is that the American system - flexible, resourceful and resilient - moved quickly to correct its mistakes and refocus its attention. Concerns about American decline ended up preventing it. America's problem right now is that it is not really that scared, Zakaria writes. The best evidence of this lack of fear is that no one is willing to talk about any kind of serious solutions that impose any pain on society.

Politicians talk a great deal about competitiveness and propose new programs and initiatives. But the proposals are small potatoes compared with, say, farm subsidies, and no one would ever suggest trimming the latter to dramatically increase spending on the sciences. The great competitive problems that the American economy faces would require strong and sometimes unpleasant medicine. Our entitlement programs are set to bankrupt the country, the health-care system is an expensive time bomb, our savings rate is zero, we are borrowing 80 percent of the world's savings and our national bill for litigation is now larger than for research and development. None of these problems is a deep-seated cultural mark of decay. They are products of government policy, writes Zakaria. Different policies could easily correct them. But taking such steps means doing something that is hard and unpopular.