The impending debt crunch and world politics

Brian M Downing 

Economic events jolt world affairs. Rising nations look for greater security, power, and territory. Borders change. European powers and the US pursued this agenda in the 19th century. Declining nations seek to hold on to what they have, along their borders and around the globe. Some rethink the importance of globalism. The Ottomans and British are cases in point here. 

For most of the last century, the US has been the most powerful country in the world, economically, diplomatically, and militarily. Its position is being challenged by China, a rising power, and by Russia, a declining one that has judiciously aligned with China. Overt war is unlikely. However, an impending debt crisis in Washington will force hard decisions and present opportunities to adversaries. 

The new politics

The federal debt today stands at $23 trillion and is expected to reach $33 trillion in ten years. The numbers are staggering and maybe unfathomable. Politicians have been promising us for decades that economic growth will lower the debt but it hasn’t happened yet, and never will. 

In ten years, as interest rates continue to rise, payments on the debt alone will near $1 trillion per year. That’s roughly what the entire Vietnam war cost in today’s dollars. Hard decisions will have to be made on the budget. Washington isn’t good at hard decisions, hence our problem. The crisis may lead to protracted paralysis and deepening polarization across political, regional, racial, and gender lines.

A new majority is coalescing that will fundamentally alter the country’s priorities and role in the world. The debt crisis may be the catalyst for change. Entitlements, they hold, are basic human rights, no different than free speech and religion. Military service at home or abroad is a thing of the past – quaint family lore passed down from grandparents. 

Their interest in the world is more attuned to human rights than national security. The country’s interest in the latter has come at the expense of the former, whether in Latin America or the Islamic world. They will doubt the usefulness and desirability of military bases in ninety countries and a defense budget roughly that of the rest of the world combined. Better to spend on education and healthcare and infrastructure. The military-industrial complex which Ike warned of will be on the defensive, if not in retreat.

Regional changes 

The US reduction in global commitments will vary from region to region. Some parts of the world will be deemed more essential in economic matters and commitment to democracy and human rights. 

East Asia

China wants to reestablish itself as the center of the world, as it was throughout all of history save for the previous 250 years – an historical anomaly in Beijing’s estimation. China can worsen American debt woes by dumping tranches of US bonds which would cause interest rates to go up even more. China could lose a great deal of its principal in the process but its T-bond portfolio has been based on political goals rather than financial ones.

China cannot be global master while ringed by powerful, adversarial neighbors aligned militarily with the US and hosting huge numbers of American fighters, missiles, and planes. 

A US pullback might be less sweeping here than elsewhere. East Asia is vital to the GDP and most countries are committed to democracy. Further, East Asian powers have sizable militaries geared increasingly against China. They may boost defense spending and perhaps even subsidize a continuing American presence.  

Europe

The great European empires are gone. Post-1945 austerity and changing attitudes toward colonies forced liquidation of foreign holdings and bases. After the bloodlettings of two world wars, Europe’s ardor for war glory has diminished greatly. The US has already reduced the number of its troops there by 75% since the Soviet Union collapsed in 1991. A US pullback, then, might not greatly affect the continent. 

European countries might increase defense spending but not profoundly. The perceptions of the Soviet/Russian threat have always been greater in Washington and Langley than in continental capitals. Russia will welcome less military readiness to the west, but it’s unlikely to take bold steps, save perhaps in the Ukraine and the Baltic states. 

Those countries would do well by reorienting their militaries away from conventional conflict based on armor and aircraft to guerrilla warfare based on armed citizens and stealth. They should look less to the lessons taught in schools at Forts Knox and Benning and more to those impressed upon enemies by the VC and mujahideen.

Further, Russia looks upon the anomie and disarray in most European countries as welcome indicators of reduced military power but also as clear evidence that such countries can never be comfortably occupied. 

(Next: the Middle East)

© 2019 Brian M Downing