SALT LAKE CITY — Over the last several years, many have asked this question: Is America in decline?

There is no doubt these are uniquely challenging times. Collectively, the country has gone through a lot over the last several years. However, for various reasons, perceptions regarding the state of the nation may not always reflect reality. With the Fourth of July holiday fast approaching, it is an opportune time to look at what is going on in the United States of America.

Reasons for pessimism

There are many reasons why people may feel uncertain and pessimistic about the future. After all, the U.S. barely regained all of the nearly 9 million jobs it lost during the Great Recession.

The economic contraction took a toll on American household and government finances alike. Trillions of dollars in net worth were lost and headlines last fall showed the national debt surpassing $17 trillion. Adding insult to injury, partisan gridlock has prevented policymakers from fully addressing these issues and many others. On top of all this, the rapid rise of China and challenges to U.S. policies abroad fuel the sentiment that America is in decline.

Reality check

The Great Recession was not only deep, but it was accompanied by a financial crisis. Work done by Harvard economists Carmen Reinhart and Ken Rogoff concludes that such scenarios take longer to recover from, helping to explain some of the economic challenges of the last several years.

With regard to the national debt, it is no doubt large and problematic. Still, it is at a manageable level and the Congressional Budget Office expects annual deficits to continue falling for the next couple of years. While the long-term drivers of deficits and the debt have not been fully addressed, there is reason to be optimistic that the worst of partisan gridlock could be behind us — for now. The Murray-Ryan deal of late 2013 reduced the likelihood of disruptive governance.

What’s right in America

While it’s evident that the U.S. has several challenges to deal with — now and in coming years­­­­ — there is much that is right in America too. Consider this: a survey published in November 2012 conducted by the state-run Bank of China stated that 60 percent of participants with assets worth $1.6 million or more were thinking about leaving the country or actively taking steps to do so. The No. 1 destination for survey participants was the United States.

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As a member of the Utah Economic Council, I had the chance to sit on a panel at the annual Utah Economic Review in late January. Generally speaking, the tone at the event was optimistic.

Why would citizens benefitting from high growth rates in the world’s second largest economy want to leave to the United States? Reasons vary from the ability to retain wealth to considerations such as education for children and environmental concerns. Wealthy Chinese citizens are not the only people in the world who still look to the U.S. for leadership and believe in its ability to solve problems and prosper. The Economist magazine published a piece in late 2013 stating that, “it is time to cheer up” and went on to say that, “America’s strengths are as impressive as ever. On every measure of power it remains dominant.”

Outside of the country, people see impressive and often unexpected developments that occur with some regularity in America. Companies such as Apple, Google, Microsoft, Facebook, Twitter and countless startups represent the tremendous innovation and creativity that is possible in this country. As the world adopts the technology produced at such firms, jobs and wealth are created. The tech sector is a major driver of growth in many areas across the country.

Energy is another example of how American ingenuity can upend prevailing wisdom. According to Citi, the U.S. will surpass both Russia and Saudi Arabia as the world’s largest oil producer. Perhaps one of the most insightful statements regarding the U.S. energy boom came from the firm’s global head of commodities research, Ed Morse.

He said that it is “very much a ‘made in America’ phenomenon. In no other country can landowners also own mineral rights. In only a few other countries is there a tradition of an energy sector featuring any independent entrepreneurial companies. … And in still fewer countries are there capital markets able and willing to support financially risky exploration and production.”

In essence, it would be hard for other countries to accomplish what the U.S. has under the same circumstances.

America maintains advantages and attributes that will not only prove hard to displace, but will continue to fuel innovation and progress on a range of issues. From military strength to financial markets, culture and its people, the position of the United States is enviable. Ultimately, these strengths enable the country to continue advancing.

Betting on America

The strengths of America are widely recognized, but many savvy investors are putting their money where their mouths are. In late 2009, just months after the Great Recession technically ended, Warren Buffett’s Berkshire Hathaway bought the Burlington Northern railroad company for $26 billion. Buffett characterized the purchase as “a bet on the country.”

From my position as a commercial real estate analyst, I view commercial real estate investments as bets on the economic outlook of areas. While there can be some unique transactions involving certain assets, for the most part, commercial real estate is a reflection of the economy it serves. I say this because economic growth and evolution drive demand for real estate. Furthermore, it’s a longer-term bet because structures are not the most liquid assets in the world.

So when I see multibillion-dollar transactions occurring regularly in cities across the U.S. (some backed by foreign money) I see a bet on America. While such transactions are widely reported when involving high-profile properties in America’s largest cities, foreign capital is also interested in areas across the country. Many times this interest is also expressed through U.S. based companies, but the same idea holds: it is a vote of confidence.

Not in decline

The U.S. remains the most powerful nation on earth both economically and militarily; furthermore, it boasts creativity and innovation that only a free society could develop. To be sure, the country is facing many large challenges and nothing is assured — our choices matter; but America is well positioned to handle its problems. Such being the case, I do not believe America is in decline.

So, this Fourth of July, enjoy the festivities and celebrations — we are privileged to live in a great country with potential that is hard to even imagine. Instead of wasting energy on unproductive dialogue, it would be entirely appropriate to take stock of all that is right and resolve to the leave the country in a better position for future generations. A happy and safe Fourth of July to all.

Darin Mellott is a senior research analyst at CBRE, the world's largest commercial real estate services firm. He is also a member of the Utah Economic Council and sits on the board of directors for the Economic Club of Utah. He tweets @DarinMellott

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