Washington Post article

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The Old Titans All Collapsed. Is the U.S. Next?

Interesting article - I would add though that this belief in manifest destiny is even stronger in contemporary Europe than in the US (deep down most Europeans see themselves as the world's sole legitimate rulers, and see American dominance as a temporary freak accident).
More widely, I think we're seeing the end of Western preeminence - two of the world's top three economies are Asian; the world's two largest foreign currency reserves are both held by Asian countries; the world's largest army, as well as, according to Pentagon estimates, the world's second-largest military budget are China's; research labs in Shanghai are as well-funded as the ones in California, while in real terms the US cuts back the National Institute of Health's budget; GDP per capita in the Shanghai Corridor is as high as Britain's, etc. While the euro is doing well (the US dollar is falling relative to just about every currency there is, including the Mexican peso), the EU also has deep structural problems (for example, Italy is approaching Argentine levels of bad governance).

It is a tad early to say the end of Western preeminence is up us. If you take the EU as one country, it becomes the largest economy in the world with the U.S. as #2. The Asian economies holding large amounts of foreign currency reserves has more to do with their economic policies than anything else (in the past, they pegged their currencies to the dollar which caused them trouble in the 90s with the East Asian currency crisis, and today they tend to have a dirty float, which they would want dollar reserves for). The largest army is somewhat irrelevant today as a more advanced, better trained military can easily crush a larger foe. GDP per capita in the rich part of a other poor country (in terms of per capita income) is equal to a first world country does not really say much in terms of the argument. Corrupt governments exist in Asia as well as Italy, and they do not necessarily always cause decline (Singapore for example).

As for the article, it appears to be the usual doom and gloom type because of the economic slowdown and George Bush, written by an author who has not studied any basic economics. All and all, it is way too early to say the West or the U.S. for that matter is in some sort of overall decline.

China is on track to overtake the US in economic size within a decade - with already the second largest military budget, whose growth is in the double digits, an increasingly technologically sophisticated China is also on track to catch up militarily in a relatively short time, particularly with the US military tied up in the Middle East. And Iraq shows that the numbers of boots on the ground do matter (as generals like Shinseki knew from the start). If China can catch up both economically and militarily, what's left?
Comparing the EU with national economies is comparing apples and oranges, unless you restrict it to the eurozone, in which case it's smaller than the US. And in the words of a Belgian diplomat, 'the EU is an economic giant, a political dwarf and a military worm.'
Bad governance is corruption plus incompetence. A corrupt but highly competent government can indeed preside over a successful economy, as in Singapore. Italy has corruption, negligence and gross incompetence - in Naples the government can't even pick up the trash, which plenty of places in the Third World can. Italy's fiscal policy makes even Bush look like a model of fiscal prudence. Italy does seem to be following the path of once-rich Argentina. If Italy defaults on her debts, that would wreck the EU's economic credibility.
Already, US influence has collapsed or is collapsing in much of the world - in Latin America, the US is now just one more player competing for influence, along with Brazil, Venezuela, Spain (a situation unprecedented since 1898) and China. Much of the resource-rich parts of Africa is already part of the Chinese economic sphere of influence. In the Middle East, the US is competing against Iran.

This is a natural occurrence.

We should have based our economy like that of the Egyptians.