Actually it was in pretty bad shape (though, addmitedly, I guess not as bad as Earth 2). World order had colapsed due to the Overmind's machinations, in which he used Richmond to make the US declare war on the whole world, and with the Squadron's help, he won, and transformed the whole world into a police state, untill a large group of Defenders came to help defeat him. Food roits, power shortages, armed conflicts in smalll and great scale. I remember vividly the scene in which the Whizzer reports crossing the globe to access the situation, and his despair as to not being able to do enough. That is what makes the Squadron decide to take over the planet and install the Utopia program, to which Nighthawk oposes.
In the sequal of the series, the GN and the one-shot, their Earth is doing quite well after the Utopia program, just, as Nighthawk predicted, without people as good as the Squadron to oversee it, the program is subverted to benefit a small corrupt group.
Peace