The premise: The military and political decline of empires often follows an economic decline as self-serving corruption eats at the center and rulers favor butter over guns. Chinese dynasties; Rome; Barney Frank and Charlie Rangel.
The question: Faced with unsustainable deficits and a limited ability to raise taxes, what will be the response of Barry Obama-Soetoro - son of a disillusioned American ex-patriot mother and a politically displaced polygamist Kenyan father; step-son of a middle class Indonesian army geologist; student of Jeremiah Wright and Bill Ayers; patron of Van Jones and Eric Holder?
The setting: The U S of A has had an unprecedented run -with 5 % of the world's population enjoying 30 % of the economy; with the dollar being the global reserve currency buttressed by the International Monetary Fund, the World Bank, and the World Trade Organization; with pliant military and political alliances spanning Europe, south-central Asia, Southeast Asia, and Latin America; with a defense budget equal to 41% of the world's military spending; with the United Nations in New York and the greatest international universities spread across the land; with McDonalds, Hollywood, and Madonna raising global cultural standards. Ah, those were the days.
The upheaval: So what happens when Obama's trillion dollar deficits make us give up the deal: the hundred Army, Air Force, Marine, and Navy bases spread around the globe; the naval bases in the Indian Ocean which protect the flow of oil to Japan and Australia; the bases in South Korea and Japan which guarantee our friends against Kim Jong il's North Korea and Hu Jintao's China; the 80,000 troops in Europe for some forgotten reason. Oh, and things like the billion dollar bribe to Egypt to leave Israel alone.
The path forward: So, where does the pied piper (whose $3.83 trillion 2011 budget has a deficit of $1.27 trillion and "discretionary security" spending of $782 billion) want to take us if he ever gets serious on the spending side?
- An age with many fewer nuclear weapons - despite a big increase in the 2011 budget. Probably a good idea. Probably will save some money in the long run.
- An age with less new military hardware - the $140 million per F-22 fighter jet; perhaps a carrier battle group or two; the moon exploration program. Secretary of Defense Gates should be able to wield a surgical knife. Will decrease some exports and spin-off civilian applications of the technologies. Bad for some of my stocks.
- An age with a lesser commitment to our long time friends - England; Israel; Japan. Definitely a bad idea, but Hillary doesn't seem to have much of a policy voice. Nature won't like the vacuums.
- An age with less global largess under the State Department's $56 billion umbrella: help for the globe's poor, hungry, sick, climate-challenged, and politically needy.
- An age of diminished expectations - for our kids and grandkids; for the kids growing up in Iran's neighborhood; for the Europeans who have long since forgotten how to protect themselves; for the 100 United Nations members who so much enjoy voting against us in the Security Council - and should start studying Chinese. A very bad idea indeed.
Sometime after the election we will get the recommendations of Obama's commission on fiscal responsibility. One assumes that it will be at least 2000 pages long and that nobody in Congress will read it. But you can also assume that it will protect the expanding health care entitlements, contain enough taxes (probably VAT) to provide the butter, and enough military and foreign policy cuts to sound retreat for the empire. Barry's mother would be proud.
This week's video is an ad being run by the Republican Governor's Association, Remember November. Much better than what the Republican National Committee is doing.
bill bowen - 4/30/10
An urgent favorite: Tom Campbell who is running in a June 8 primary to face Barbara Boxer in November. Harvard Law; U of Chicago PhD in economics; 5 term congressman from Silicon Valley; twice named the most frugal member of Congress by the National Taxpayers Union Foundation; a fountain of fiscally conservative/socially moderate ideas.