Posted on 02/26/2003 5:35:20 AM PST by Norm640
Remember all that fuss a few years back about imperial over-stretch in the United States? Paul Kennedy's much-hyped, little-read book, "The Rise and Fall of the Great Powers" posited that the huge American deficits of the 1980s were a sign of imminent, or at least unavoidable, American collapse.
He was wrong, it turned out. All that defence spending in the 1980s - by helping to bring the Soviet Union to its knees and opening up a quarter of the planet to the global market - turned out to be a bargain. The 1990s - those golden, reckless, Clintonian years of American wishful thinking - were the peace dividend. And if America had an empire in the twentieth century, it was definitely on the cheap - a ramshackle and ad hoc series of arrangements designed to maintain the global trading system from which the United States benefited so much.
But maybe Kennedy was merely a little ahead of his time. Two things strike me about America's current position in the world. The first is that Washington actually is contemplating something far more like an actual empire than it has since the reconstruction of Western Europe and Japan in the 1940s and 1950s.
The war to depose Saddam is not some fitful venture. It's a direct product of a line of thinking that has been developed in the U.S. for the past two decades but which only secured a decisive intellectual victory in the wake of 9/11. That view is that the West will for ever be plagued by terrorism, disruption and even nuclear, biological or chemical catastrophe if we do not find some way to bring stability and some level of democracy to the Middle East. The Iraqi protectorate that will emerge after a successful war is the first attempt to show the way forward. Afghanistan's difficult and slow shift from a theocratic dictatorship was the prelude. Iran and Saudi Arabia will follow.
This isn't empire in a strict nineteenth century sense. But it is empire in one obvious and demonstrative way: if it works or if it fails, it's going to cost a small fortune.
In fact, the real effect of the current diplomatic train-wreck that is preceding the war against Saddam is not to derail the United States from living up to its responsibilities in enforcing vital U.N. resolutions. It is to isolate the U.S. in the post-Saddam settlement. It means that not only will this war be paid for almost entirely by Americans, with some allied support. It means that reconstruction will also have to come out of the paychecks of average Americans. The cost right now is incalculable.
But no-one believes it will be much short of crippling. And any attempt to use Iraqi oil revenues to defray the cost will not only be politically difficult, but is also dependent on Saddam's not doing all he can to sabotage the oil fields while he still can. Besides, the kind of commitment we're talking about may only last a few years in Iraq (if we're lucky) but will engage the U.S. deeply in that part of the world for at least a generation.
Now take a look at the budget just presented to the Congress by the Bush administration. The first thing you'll notice is that there is no accounting for the cost of the coming war. None. Nor is there any accounting for the huge sums that will be needed for reconstruction of Iraq - a task every bit as essential as ensuring that weapons of mass destruction are destroyed and kept out of the hands of terrorists.
Where are these calculations? The administration says it could not account for them because there was no inevitability of war. But not even a contingency fund? Or an appendix that could lay out some figures? Nope. The only description for this kind of fiscal insouciance is irresponsible.
Then take a look back at the first three years of Bush budgeting. You'd think a hyper-liberal had been elected to the presidency. In the first three years of Bush's presidency, non-defense discretionary government spending will have gone up an inflation-adjusted 18 percent. That doesn't include the expensive entitlement programs - for the sick and elderly - that will balloon in the next couple of decades. It doesn't include the money spent on the military or in the war on terror. It's the kind of pure spending Congressmen and Senators like so much - good old pork-barrel projects that help them win re-election. And it's also full of perfectly admirable things - like spending on education or the astonishingly generous $15 billion worth of spending to combat AIDS in Africa. To give you an idea of Bush's domestic profligacy, consider that in Clinton's first three years, domestic discretionary spending actually fell. Even Reagan reduced this type of spending by 13 percent in his first three years. Yes, in 2000 and after, a deflationary period probably merited some spending increases. Inflation had disappeared; the economy was in a post-bubble slump; deflation stalked the earth. But 18 percent? If a Democrat had done that, the Republicans would have been all over him. And rightly so.
Last year, president Bush declared that budget deficits would be temporary. This year, even the administration concedes they stretch into the foreseeable future - and that's without the expenses of an unpredictable war and open-ended occupation. Some of this is due to tax cuts, of course, the centre-piece of Bush's economic plan. But much of it is also due to out-of-control spending. Neither side of the equation looks like it will be altered much in the future.
This is not, I hasten to add, a crisis. The deficit is still, in GDP terms, a third of its heights under Ronald Reagan. The U.S. economy is still healthier than almost every other developed country. Its debt is not that serious. But all this changes when you consider what lies ahead: the most ambitious foreign policy project since the Marshall Plan, achieved in the teeth of European opposition and, unlike the first Gulf War, unsubsidized by Japan. It's also inevitable, I think, that the current war will result in blowback - horrifying attacks on American cities that will again cost vast sums to repair. All this is a huge fiscal challenge as well as a moral and psychological one.
I think Americans will willingly support this struggle. Unlike the French and Germans, they're interested in actually changing the world for the better, not finding excuses for doing nothing, while lethal threats mount. But the critical middle ground of American politics will not want to drive itself into mounting and crippling debt to do so. The administration will soon have to adjust its fiscal policy with its foreign policy - rescinding a few future tax cuts, trimming some domestic spending, or a healthy combination of the two. Over-stretch isn't here yet. But if Washington doesn't get its fiscal act together soon, it may come sooner than we think.
Are we ready for this? Clearly,the Bush Admin. has no ability to handle our money. Our future prosperity hangs in the balance. It had better be worth it.
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