For all my criticism of the body politic in the United States, it is a very myopic commentator indeed who claims that the United States is, "in the toilet," or lagging in any meaningful way behind Europe nations (or the OECD, generally).
Economically, the United States continues to be sound. It has an enormous fiscal policy gap that must be closed, but when people stop running to the dollar for cover, Congress will be forced, finally, to give up its political cowardice and tax at a level necessary to meet the programs that it seeks to fund. There is also a huge income gap, which will lead, inevitably, to a paradigm shift away from fiscal conservativism towards a more equitable distribution of wealth.
Politically, the United States continues to present all of the hallmarks of a free and democratic society: free and fair elections, a free press, rule of law, protection for minorities and property rights. These may not be perfect, but recent events in Pennsylvania should serve to remind us that these foundational elements of democracy continue to exist.
Socially, the United States is presented with challenges, to be sure. Some stem from her fiscal policy mess, and her failure to adequately fund programs (like education and health care). Some stem from her failure to use the public sector to drive adaptation in the labour force. But life in the United States for the vast majority of residents continues to be safe, secure and comfortable.
There are countries that do certain things better than the United States, but when examined on a broad basis, the United States is every bit as well advanced as the countries in Western Europe. Only 12 countries score over 0.9 on the Human Development Index--and the United States is one of them.
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--James