The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era Read online

  The financial collapse of 2008 and the deep recession that followed have already eliminated one major economic role. With Americans spending less and saving more, the United States has ceased to be the world’s consumer of last resort, on which other countries can rely to buy the products they made for export. The dollar remains the world’s principal currency, but as much because of the lack of a viable substitute as because of global confidence in American economic dependability. The continuation of the special status of the American currency in world markets is far from assured.

  The policy of using American military forces to protect people persecuted by their own governments, which the United States carried out in Somalia, Haiti, Bosnia, and Kosovo (and considered but rejected carrying out in Rwanda and Darfur), will not be repeated. Nor will the kind of strenuous effort to foster democracy that the American government undertook in Afghanistan and Iraq be repeated elsewhere, or even continued in those places indefinitely. Neither mission will earn the necessary political support from an inwardly preoccupied American public worried about increases in the costs and reductions in the benefits of entitlement programs.

  The enterprise of state-building, to which the post–Cold War military interventions led, will disappear from the foreign policy agenda of the United States. At the beginning of the century’s second decade this trend was already apparent. The dispatch from Yemen of a Nigerian terrorist to attempt to blow up an American airliner, and a destructive earthquake in Haiti, made those two countries prime candidates for American state-building efforts according to the criteria of the first two post–Cold War decades. Ten years earlier the United States might well have made such an effort in either or both places. In 2010, however, the political will and economic resources for the task were not available. State-building had become a luxury the United States could no longer afford. Accordingly, all the talk of reforming the agencies of the federal government—the State and Defense departments in particular—to equip them to create working institutions in poor, war-ravaged countries will remain just that: talk.

  America’s military interventions were intended to diminish oppression, relieve suffering, protect the innocent, and establish order and a measure of justice in the places where they occurred. At least to some extent, they succeeded. For those who might have hoped for comparable assistance from the United States in the future, but because of American economic constraints will not receive it, therefore, the world will be a more disorderly and dangerous place.

  The impact of fiscally driven restraints on American foreign policy will go well beyond the end of deep involvement in the affairs of poor, distressed countries. As the country’s fiscal condition deteriorates, political pressure in favor of a preference for butter over guns will grow, which will affect the defense budget. The political battles over how much to spend on defense will be intense ones because defense expenditures command both strong supporters—those who benefit from them will organize to lobby in favor of them—and strong arguments—most of the defense budget supports missions of greater importance to American and global security than humanitarian intervention and democracy promotion. Specifically, the personnel and weaponry that the defense budget goes to purchase make possible the American presence in three crucial regions, East Asia, Europe, and the Middle East, where three countries—China in the first, Russia in the second, and Iran in the third—have the potential to disrupt the peace on which the United States and other countries of these regions, and indeed the whole world, depend.

  Fortunately, the capacity for disruption is inversely related to the incentive for it: China could create economic, political, and even military havoc in East Asia but has powerful reasons not to do so. The Islamic Republic of Iran, by contrast, is determined to dominate the Persian Gulf region and the greater Middle East, but has only comparatively modest means to support its ongoing campaign to achieve this. In capabilities and intentions Russia falls between the two of them. Still, a challenge to regional peace and prosperity is possible in all three places, American power will remain the indispensable core of a successful response to any such challenge, and with the decline in resources available for projecting that power beyond the borders of the United States the American government will attempt, in all three regions, to enlist other counties to discourage and, if necessary, to resist dangerous initiatives.

  In East Asia this trend is already under way. In response to China’s rapid economic growth, Washington has sought to broaden its cooperation with the other Asian giant, India, in order to supplement its existing alliances with Australia, New Zealand, South Korea, and Japan and its ties with the countries of Southeast Asia, all of which date from the Cold War (or in the case of communist Vietnam, from the first post-Cold War decade.) The United States and the countries of Asia disavow any intent to contain China, or to stifle its economic and political rise; and they would certainly prefer not to have to confront the People’s Republic. Even if aggressive Chinese policies make confrontation seem necessary, China’s large and growing economic importance will make its neighbors and trading partners reluctant to adopt explicitly anti-Chinese policies.

  In Europe, the prospects for checking any Russian effort to overturn the political and economic status quo appear more promising. Not only is Russia weaker than China, and destined to grow weaker over time, but a European multilateral alliance that is more than six decades old already exists. NATO’s ostensible twenty-first-century purpose is to promote democracy, not to contain Russia, but its eastern members joined precisely because they wanted the insurance they assumed the alliance would provide against unwanted attention from the Russians. It would be easy for NATO to resume its Cold War policy of containment, then directed against the Soviet Union, and apply it to post-communist Russia. It would not be easy, however, for such a policy to be effective. NATO, during the Cold War a robust multinational military organization, has now become a hollow shell. None of its members, including the United States, is prepared to deploy major military forces on the territories of its former Soviet-bloc members to check Russian military power, as NATO forces were deployed in large numbers in Germany to deter the Soviet Union during the Cold War.

  The kind of diplomatic initiative most likely to strengthen the American position in Europe is one that would improve relations with Russia—which were on course for a productive partnership only to be derailed by the misguided decision to expand NATO eastward in the 1990s. For such an initiative to be successful, however, it was, at the beginning of the second decade of the twenty-first century, both too late and too soon. It was too late to avoid, or even mitigate, the damage to Russia’s relations with the West that NATO expansion inflicted. It was too soon to reorient those relations in a fundamental way because that would require the replacement of the Putin regime in Moscow with one less resolutely hostile to the United States, a hostility that is deep enough to be part of the regime’s basic political identity. That regime, with or without Vladimir Putin, will not last forever, but when and how it will change cannot be predicted. What can be safely predicted is that any such change will come from forces within Russia, and not by dint of pressures exerted by other countries.

  The Middle East is the region that will most urgently require American power to counteract a threat because it is in that region that the threat is most acute. The Islamic Republic of Iran is deeply and openly committed to, and actively works for, overturning the existing political and economic arrangements there. It seeks to displace the United States as the region’s most powerful country, to replace the governments of the Middle East with regimes that accept its primacy and, where possible, reproduce its own brand of Islamic fundamentalism, and to destroy the United Nations–created and internationally recognized sovereign state of Israel. The Iranian agenda is, in short, ambitious, specific, and pernicious.

  An American military presence in some form will be necessary to deter Iran as long as the clerical regime holds power. Its aspirations for at least regional dominanc
e are sufficiently virulent that the United States may find itself in open warfare with the mullahs and their armed forces. Of the three regions of the world of continuing strategic importance, moreover, the Middle East is the one with the least promising collection of potential allies. The Arab countries that Iran has targeted are weak, with dictatorial governments that command little popular support, and are thus unlikely to be able to make substantial political, let alone military, contributions to their own defense. Muslim but non-Arab Turkey has belonged to NATO for more than half a century, but the assumption of power there by an Islamic political party has put in doubt its solidarity against Iran. The United States will therefore increasingly cooperate with the only democratic and reliably pro-American country in the Middle East, a country with a legitimate government, a cohesive society, and formidable military forces: the state of Israel.

  While the United States has only limited scope for strengthening its position in the Middle East by constructing a broad coalition to oppose Iran, it is within America’s power to help stabilize the region in another way: by weakening Iran. The thus far unutilized vehicle for achieving this aim, as well as for improving the American position in Europe, East Asia, and other places, is a substantial reduction in American oil consumption. Using less oil is the single measure that would do the most to advance American interests in the world. It is as central, in its way, to the twenty-first-century pursuit of those interests as the policy of containing the Soviet Union and international communism was during the Cold War.

  Lowering the world price of oil through a dramatic decrease in demand would reduce the resources at the disposal of the governments of both Iran and Russia, which depend on the sale of the oil within their borders for the funds that support the policies that the United States opposes. The United States can reduce its consumption of oil by raising the price of gasoline through a tax on it, which would motivate consumers to use less, mainly by driving fuel-efficient vehicles. Manufacturers would thus have an economic incentive—which is the only kind of incentive that counts in business—to develop and produce such vehicles. Once available, drivers all over the world would purchase them. Furthermore, a gasoline tax would send a great deal of money directly to the American treasury, which would help address the underlying cause of the ebbing of American foreign policy: the large and growing gap between the federal government’s income and its entitlement-driven expenses.

  A reduction in oil consumption through a sizable tax on gasoline in the United States would have yet a third, in this case political and symbolic, beneficial consequence for the American position in the world and for stability in East Asia, Europe, and the Middle East. It would demonstrate what has not been in evidence in the post–Cold War era: an American capacity for effective collective action to address a major problem. It would further demonstrate that the American people, through the establishment by their elected representatives of a major levy on an indispensable product, are capable of imposing short-term sacrifice on themselves in pursuit of a major international goal. It would demonstrate, finally, that the United States is capable of taking steps to deal with an issue that affects the entire world. It would offer, that is, a vivid example of American global leadership.

  As such, it would enhance the image of the United States among friendly and unfriendly countries as a resolute and effective global leader. It would burnish the American reputation, which the international misadventures of the first two post–Cold War decades and the failure of the American financial system in 2008 have tarnished, for meeting challenges beyond its borders. This would reinforce the American position in the three key regions and diminish the likelihood that China, Russia, or Iran would mount a violent assault on it, because in international relations the image of and reputation for power form part of the substance of power itself, and the international order will continue to depend, for its stability, on American power.

  Even if elected public officials in the United States should find a way to impose a steep tax on gasoline, however, the country’s fiscal condition in the second decade of the twenty-first century and beyond will place unaccustomed constraints on American foreign policy. Here a final illustrative comparison can be made, to the circumstances of America’s state and local governments in the wake of the financial crisis triggered by the events of September 15, 2008, and the deep recession that followed. With tax revenues sharply reduced by the economic downturn, they found themselves facing their own version of the federal government’s gap between income and expenditures. The State of California faced a particularly large budget deficit. Unlike the federal government, however, states and municipalities cannot print the money they need to meet their obligations, and their capacity for borrowing to make up their shortfalls is far more limited than their federal counterpart’s. They therefore had to reduce services. All over the United States, police forces were cut, library hours were curtailed, teachers from the elementary to the university levels were laid off, and public health facilities were closed.

  Like American state and local governments to the citizens within their jurisdictions, the United States provides governmental services to the world. As the fiscal burden it must bear grows heavier, America, like California, will become less generous in furnishing these services. The world will thus get less, and less effective, governance. The precise consequences for global peace and prosperity cannot be foreseen, but they are not likely to be benign, and this will ensure that international politics will change in at least one noticeable way.

  In the first decade of the twenty-first century, much of the world expressed—through rallies, speeches, petitions, and public opinion polls—its disapproval of a series of American foreign policies, above all the war in Iraq. They generally considered such policies to be the result of the United States’ having too much power. In the century’s second decade the economic conditions in which the United States will have to operate will lead to what are all too likely to be the far more disagreeable and globally damaging consequences of the United States’ having too little power. One thing worse than an America that is too strong, the world will learn, is an America that is too weak.

  INDEX

  Afghanistan

  al Qaeda in

  Bush administration and

  conclusions regarding

  defense spending on

  European cooperation and

  foreign policy future and

  fundamentalist groups of

  Obama administration and

  Africa

  Aging society

  See also Entitlement programs

  Ahmadinejad, Mahmoud

  Al Qaeda

  Alternative fuels, reduced consumption of oil and

  American Budget

  See also Economy, United States; Entitlement programs

  American debt. See Debt, American

  American foreign policy

  for Afghanistan

  Anti-Americanism and

  changes in

  Cold War and

  conclusions regarding

  debts as drain on

  demographics and

  economic constraints regarding

  history of

  imperial overstretch and

  limits upon

  post-Cold War

  taxes on oil and

  in two decades after 1945

  world security and

  See also Cooperation; Defense spending; Iraq, occupation of; North Atlantic Treaty Organization (NATO)

  American Government

  affecting entire world

  American politics and

  formidable international commitments of

  future economic imperatives of

  profligate spending habits of

  as provider of governance to the world

  shift in priorities of

  as unable to afford future entitlement programs

  See also World Government

  American International Group

  Ame
rican military

  See also American foreign policy; Iraq, occupation of

  Anti-Americanism

  Arab-Israeli conflict

  Atomic bomb

  Axis powers of World War II

  Aziz, King Abdul

  Baby-boom generation

  demographics and

  entitlement program costs and

  Balkan interventions

  Beckett, Samuel

  Beijing, China

  Bilmes, Linda

  Bosnia

  Bryan, William Jennings

  Budget, American

  See also Economy, United States; Entitlement programs

  Bush administration

  Afghanistan and

  Arab-Israeli conflict and

  cardinal sin of

  Iraq disaster of

  Middle East hostility towards

  NATO expansion and

  See also Iraq, occupation of

  Bush, George W.

  American foreign policy after Cold War and

  oil and

  CAFE (Corporate Average Fuel Economy)

  Chavez, Hugo

  China

  American debt and

  Cold War military initiatives of

  conclusions regarding

  cooperation and

  currency of

  economic contributions to armed forces of

  economic policies of

  Germany compared with

  global security order and

  historical international greatness of

  and Japan

  as most obvious candidate to disrupt the twenty-first-century international order

  as nuclear-armed and formerly orthodox communist

  poverty of

  reducing America’s oil use and

  Russia and

  soothing statements of

  as superpower

  Tawain and

  war and

  Chu, Steven

  Churchill, Winston

  Climate change

  Climate change conference Copenhagen