
The United States emerged from World War II in a position of global dominance. From this unparalleled military and economic power came a Pax Americana that has endured for more than six decades. It seemed the sun would never set on the U.S. empire.
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CHRISTOPHER LAYNE
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The United States emerged from World War II in a position of global dominance. From this unparalleled military and economic power came a Pax Americana that has endured for more than six decades. It seemed the sun would never set on the U.S. empire.
But America is increasingly unable to play the hegemon’s assigned role. Militarily, a hegemon is responsible for stabilizing key regions and guarding the global commons. Economically, it offers public goods by opening its domestic market to other states, supplying liquidity for the world economy, and providing the reserve currency. A hegemon is supposed to solve international crises, not cause them. It is supposed to be the lender of last resort, not the biggest borrower. Faced with wars it cannot win or quit and an economy begging rescue, the United States no longer fits the part.
Still, many in the mainstream foreign-policy community see these as temporary setbacks and believe that U.S. primacy will endure for years to come. The American people are awakening to a new reality more quickly than the academy. According to a December 2009 Pew survey, 41 percent of the public believes that the U.S. plays a less important and powerful role as a world leader than it did a decade ago.
The epoch of American dominance is drawing to a close, and international politics is entering a period of transition: no longer unipolar but not yet fully multipolar. President Barack Obama’s November 2009 trip to China provided both substantive and emblematic evidence of the shift. As the Financial Times observed, “Coming at a moment when Chinese prestige is growing and the U.S. is facing enormous difficulties, Mr. Obama’s trip has symbolized the advent of a more multi-polar world where U.S. leadership has to co-exist with several rising powers, most notably China.” In the same Pew study, 44 percent of Americans polled said that China was the leading economic power; just 27 percent chose the United States.
Much of America’s decline can be attributed to its own self-defeating policies, but as the U.S. stumbles, others—notably China, India, and Russia—are rising. This shift in the global balance of power will dramatically affect international politics: the likelihood of intense great-power security competitions—and even war—will increase; the current era of globalization will end; and the post-1945 Pax Americana will be replaced by an international order that reflects the interests, values, and norms of emerging powers.
China’s economy has been growing much more rapidly than the United States’ over the last two decades and continues to do so, maintaining audacious 8 percent growth projections in the midst of a global recession. Leading economic forecasters predict that it will overtake the U.S. as the world’s largest economy, measured by overall GDP, sometime around 2020. Already in 2008, China passed the U.S. as the world’s leading manufacturing nation—a title the United States had enjoyed for over a century—and this year China will displace Japan as the world’s second-largest economy. Everything we know about the trajectories of rising great powers tells us that China will use its increasing wealth to build formidable military power and that it will seek to become the dominant power in East Asia.
Optimists contend that once the U.S. recovers from what historian Niall Ferguson calls the “Great Repression”—not quite a depression but more than a recession—we’ll be able to answer the Chinese challenge. The country, they remind us, faced a larger debt-GDP ratio after World War II yet embarked on an era of sustained growth. They forget that the postwar era was a golden age of U.S. industrial and financial dominance, trade surpluses, and persistent high growth rates. Those days are gone. The United States of 2010 and the world in which it lives are far different from those of 1945.
Weaknesses in the fundamentals of the American economy have been accumulating for more than three decades. In the 1980s, these problems were acutely diagnosed by a number of writers—notably David Calleo, Paul Kennedy, Robert Gilpin, Samuel Huntington, and James Chace—who predicted that these structural ills would ultimately erode the economic foundations of America’s global preeminence. A spirited late-1980s debate was cut short, when, in quick succession, the Soviet Union collapsed, Japan’s economic bubble burst, and the U.S. experienced an apparent economic revival during the Clinton administration. Now the delayed day of reckoning is fast approaching.
Even in the best case, the United States will emerge from the current crisis with fundamental handicaps. The Federal Reserve and Treasury have pumped massive amounts of dollars into circulation in hope of reviving the economy. Add to that the $1 trillion-plus budget deficits that the Congressional Budget Office (CBO) predicts the United States will incur for at least a decade. When the projected deficits are bundled with the persistent U.S. current-account deficit, the entitlements overhang (the unfunded future liabilities of Medicare and Social Security), and the cost of the ongoing wars in Iraq and Afghanistan, there is reason to worry about the United States’ fiscal stability. As the CBO says, “Even if the recovery occurs as projected and the stimulus bill is allowed to expire, the country will face the highest debt/GDP ratio in 50 years and an increasingly unsustainable and urgent fiscal problem.”
The dollar’s vulnerability is the United States’ geopolitical Achilles’ heel. Its role as the international economy’s reserve currency ensures American preeminence, and if it loses that status, hegemony will be literally unaffordable. As Cornell professor Jonathan Kirshner observes, the dollar’s vulnerability “presents potentially significant and underappreciated restraints upon contemporary American political and military predominance.”
Fears for the dollar’s long-term health predated the current financial and economic crisis. The meltdown has amplified them and highlighted two new factors that bode ill for continuing reserve-currency status. First, the other big financial players in the international economy are either military rivals (China) or ambiguous allies (Europe) that have their own ambitions and no longer require U.S. protection from the Soviet threat. Second, the dollar faces an uncertain future because of concerns that its value will diminish over time. Indeed, China, which has holdings estimated at nearly $2 trillion, is worried that America will leave it with huge piles of depreciated dollars. China’s vote of no confidence is reflected in its recent calls to create a new reserve currency.
In coming years, the U.S. will be under increasing pressure to defend the dollar by preventing runaway inflation. This will require it to impose fiscal self-discipline through some combination of budget cuts, tax increases, and interest-rate hikes. Given that the last two options could choke off renewed growth, there is likely to be strong pressure to slash the federal budget.
But it will be almost impossible to make meaningful cuts in federal spending without deep reductions in defense expenditures. Discretionary non-defense domestic spending accounts for only about 20 percent of annual federal outlays. So the United States will face obvious “guns or butter” choices. As Kirshner puts it, the absolute size of U.S. defense expenditures are “more likely to be decisive in the future when the U.S. is under pressure to make real choices about taxes and spending. When borrowing becomes more difficult, and adjustment more difficult to postpone, choices must be made between raising taxes, cutting non-defense spending, and cutting defense spending.” Faced with these hard decisions, Americans will find themselves afflicted with hegemony fatigue.
The United States will be compelled to overhaul its strategy dramatically, and rather than having this adjustment forced upon it suddenly by a major crisis, the U.S. should get ahead of the curve by shifting its position in a gradual, orderly fashion. A new American global posture would involve strategic retrenchment, burden-shifting, and abandonment of the so-called “global counterinsurgency” being waged in Afghanistan and Iraq.
As a first step, the U.S. will need to pull back from its current security commitments to NATO, Japan, and South Korea. This is not isolationism. The United States undertook the defense of these regions under conditions very different from those prevailing today. In the late 1940s, all were threatened by the Soviet Union—in the case of South Korea and Japan, by China as well—and were too weak to defend themselves. The U.S. did the right thing by extending its security umbrella and “drawing a line in the sand” to contain the Soviet Union. But these commitments were never intended to be permanent. They were meant as a temporary shield to enable Western Europe, Japan, and South Korea to build up their own economic and military strength and assume responsibility for defending themselves.
There are several explanations for why the U.S. did not follow through with this policy. Fundamentally, during the Pax Americana there was no need. As the U.S. declines, however, it will be compelled to return to its original intent. If we remember that an eventual pullback was the goal of U.S. policy, strategic retrenchment in the early 21st century looks less like a radical break than a fulfillment of strategic goals adopted in the late 1940s.
Burden-shifting—not burden-sharing—is the obvious corollary of strategic retrenchment. American policy should seek to compel our allies to assume responsibility for their own security and take the lead role in providing security in their regions. To implement this strategic devolution, the U.S. should disengage gradually from its current commitments in order to give an adequate transition period for its allies to step up to the plate. It should facilitate this transition by providing advanced weapons and military technology to friendly states in Europe and Asia.
Next: The end of Pax Americana – Part II
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The Great Game- Renewed – I.5
“Tim Osman” was the name assigned to Osama bin Laden by the CIA for his tour of the U.S. and U.S. military bases, in search of political support and armaments. [...] There is some evidence that Tim Osman … visited the White House. There is certainty that Tim Osman toured some U.S. military bases, even receiving special demonstrations of the latest equipment. Why hasn’t this been reported in the major media…? The answer is that the US is now obsessed by the Afghan war i.e. operation Geronimo, and therefore the western media too put a blind eye to OBL’s days with the CIA.
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AND FINALLY…
THE BEAR TRAP IS SPRUNG
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by Hassan Rizvi
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He allowed a free hand to the CIA approved Wahabi Islamic doctrine to gain a firm foothold in Pakistan. Passing pro-Islamic legislation, he allowed FIB (Faisal Islamic bank) to start Islamic banking systems, and created Islamic courts. Most importantly, he imposed a new religious tax which was used to create tens of thousands of madrassas, or religious boarding schools, where “Islamic text books’ printed in USA and approved by CIA were taught. These schools would be used to train and indoctrinate a large portion of future Islamic militants using courses developed in the USA.
“Radical Islamist ideology began to permeate the military and the influence of the most extreme groups crept into the army,” writes journalist Kathy Gannon in her book ‘I is for Infidel’. The BBC later commented that Zia’s “Islamization” policies created a “culture of jihad” within Pakistan that continues until present day. Meanwhile ISI took over to continue the field work and launched a massive campaign of terrorism, assassinating hundreds of teachers and civil servants in Afghanistan.” (more…)
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on April 29, 2010 at 11:27 pm Comments (6)Tags: Afghanistan, Central Asian oilfields, Pakistan, Pipelinestan