It's partly your American schooling (and mine). We largely follow a 'westernizing' myth that moves centers of 'civilization' progressively from east (Egypt/Mespotamia) further west (Greece, then Rome), acknowledges Spain/Portugal in the 14th-16th centuries, then moves on to France, England, and culminates in the "highest" state here in the US (conveniently).

But such histories, while myth-histories, aren't invented quite out of nowhere. It's quite clear that Spain reached an apex in terms of global power, at least, under the Habsburgs and such, and then declined in these terms (although not necessarily absolutely). Many reasons for this have been proposed, including a number that are racist or culturally essentialist -- even those of major scholars such as David Landes somewhat fit this model! More serious arguments look at socio-economic structures such as how landed classes kept an ascendancy while a bourgeoisie largely did not form, ecological factors like droughts and quality of land, or outside factors like the shifting of trade routes. I'm sure you'll get some good answers here, but it's important to note that there is not a consensus on this question.

In chapter 2 of his book "The Rise and Fall of the Great Powers" (which I highly recommend), Paul Kennedy cites multiple reasons for Spain's decline, but most notably the weakening of the country as a result of the Habsburg wars in the 16th and 17th century. Basically Spain exhausted its finances in the ruinous "Eighty Years War" against the newly independent Netherlands and various conflicts with France and England.

• Why did Spain/the Habsburgs want so desperately to keep control of the Netherlands? Two potential reasons:

1. It was one of the richest mercantile centers in Europe.

2. To keep it out of the spheres of other great powers, notably France.

• The problem: Armies are expensive and the Netherlands was difficult to conquer due to the terrain and improvements in fortifications. This caused sieges to drag on, and even if a fortress was captured, it could easily be retaken by the Dutch rebels once the bulk of Spanish forces moved on.

• Spain needed funds to maintain both their armies in Europe and their fleets defending distant colonies. Armies of that time were becoming increasingly expensive to maintain, but lacking reliable cash flow, Spanish monarchs took out loans, imposed new taxes, and relied on the influx of silver and gold from the colonies (of which they took the so-called "royal fifth" to pay for their wars. This led to inflation and actually resulted in much of Spain's colonial wealth, which looks impressive on paper, being sent away to foreign creditors. With every loan, interest rates increased while the crown's credit rating plummeted.

• Spain increasingly relied upon nations like England and even the Netherlands for imported manufactured goods and services. Kennedy says that "by 1640 three-quarters of the goods in Spanish ports were delivered in Dutch ships. " EVEN THOUGH they were at war. England and the Netherlands began to dominate trade in Europe while Spain remained dependent upon the precious metals from the colonies. Presumably colonies aren't much use if you're using their wealth to pay everyone else.

I'm sure there are many other factors I've missed. I highly recommend you check out Kennedy's book.

In general, the unsustainable financial practices during Spain's wars ruined its credit and weakened its economy while benefitting its rivals. Because of such policies, Spain's mercantile and industrial development stagnated relative to that of England, France and the Netherlands. It failed to make full use of its colonies with its reliance on precious metals. This was unlike England, for example, which in later centuries imported raw goods from the colonies and manufactured finished goods IN England as part of a growing industrial economy that allowed it to be largely self sufficient.

Have you just taken US history, or also European history? If just the former, then then impact of Spain on US history faded in textbook importance after the colonial period, but Spain had interests in the North American continent well into the 19th Century.

Florida (whose history is tragically ignored by textbooks, but that's another story) wasn't turned over to America until the 1820s, and California was under Spanish rule through the time period. San Francisco was basically founded to put Spain's claim on Alto California to protect it (via a presidio with canons covering the Golden Gate) from encroachment by all the major powers that were sniffing around during that time period.

If you're talking about European history, Spain was one of the major superpowers on the continent for centuries. The Habsburgs ( http://en.m.wikipedia.org/wiki/House_of_Habsburg) were one of the most powerful families in all of European history.

While Spain certainly didn't win all their conflicts, they were pretty instrumental in doing things like keeping Louis XIV in check and establishing the concept of a balance of power in Europe. Their tercio formation was one of the most dominant in Europe for about a hundred years, which includes the time period you consider them to have vanished from history.

I'm not sure how much spanish you know, but there is a term in spanish that describes just this: el marasmo. This is a subject that many spanish thinkers puzzled over for centuries. I think the best example comes from Benito Jerónimo Feijóo y Montenegro. Feijóo was the most important enlightenment thinker is spain. He discusses why Spain seems to be behind, in comparison to other countries, in terms of philosophical thought. This is in a letter found in Cartas eruditas y curiosas, which was written in the mid 18th century. The letter is titled "Causas del Atraso", which means "Causes of Backwardness". He believes that the system of academia, where scholars obsessed over Aristotle, and attempted to repress the works of Descartes, Newton, and others (even attempting to get the inquisition to ban them as heresy, even though the boards already approved them). Spanish intellectual elite felt threatened by foreign ideas, particularly enlightenment thought, which is what Feijóo championed. They refused to read and understand what other countries around them were doing (IE physics, ideas like ergo sum cogito, etc). During this time, there was also some disorganization on a governmental level, and the spanish language was not a unified one on the iberian peninsula.

Now, lets fast forward 120 years or so, to the year 1898. What has happened since then. Napoleon invaded spain, imprisoned its king, which led to the formation of Juntas, or local governments, which imposed the constitution of 1812, which, when the king returned, attempted to reject, leaving the country in political chaos. Meanwhile, in Hispanoamerica, the colonies, led by figures like Simón Bolivar and Jose de San Martin, revolted against Spain, la patria, because they perceived they were not equal members of the kingdom, like the Juntas professed. Spain was busy resisting Napoleon, and not it a particularly good position to stop them. Spain loses the majority of its colonies, leaving it only with small ones like Puerto Rico, Cuba, and Guam. Spain loses all of them in 1898 after the Spanish American War. You need to understand the implications this had on the national psyche of Spain. The empire was dead, they had no more colonies. This led a a group of writers, who searched for the soul of spanish, to be known as Generación 98.

Of these, the most relevant is a man named Unamuno, who attempted to answer your question exactly. In his book En Torno al Casticismo, he has an essay "Sobre el marasmo actual de España". He sought to determine why the spanish empire had crumbled, and came up with a list of ideas. These include a lack of cohesive understanding of what it meant to be a Spaniard, the ridiculous notion of the "purity of Castilian blood" in Spain, inflexible attitudes, and "jovenes sin juventud" [Youth without the spirit of youth], and the inability to look to other western countries to see what worked. Essentially, spain would only look inward, never outward, and siolated itself from the rest of the world. I bring this up, because this is exactly what Feijóo was writing about a century and a half ago. Spain isolated itself from the rest of the world, and resisted developing and industrializing, due to its aversion to other western ideas. As powers like France, Germany, and England rose, it did not develop in pace, the intellectual elite did not develop as other sciences focused on new philosophies and scientific thought, and they slowly lost their grip on the spanish empire as Hispanoamerica sought independence, and the rising power in the United States exerted more influence.

I think the reason is economic. I belive it has much more to do with power relations in the country. In england the trade with the colonies was not monopolised, many traders, a emerging middle class. The parlament managed to take more and more controll from the king, less monopoly and so on. This leads to the industrial revolution, not steam engine or coal.

In spain things where diffrent, the king got very rich and powerful thanks to there empire but there was no emergin middle class, the parlament did not have enougth power. This leads to them missing the train on industrial revolution.

Granted other countrys managed to catch up but spain didn't. I would have a harder time exlaining this.

Source: Why Nations Fail