AIP column: Imagine there’s no strong America

posted at 8:46 am on May 28, 2009 by Ed Morrissey

For this week’s AIP column, I allowed my imagination to run after seeing multiple warnings this past week about the credit rating for US Treasuries.  The rapid increase in deficit spending by the Obama administration has analysts worried, and investment rating systems — stung by accusations of inaction during the housing bubble — have begun raising red flags about US debt.  Standard and Poors has already issued a specific warning to the UK that they may get rating a “negative” risk, which will make it much harder and costlier to cover their own deficit spending, and the US will probably be next.

If the US can no longer sell enough Treasuries to cover the deficit, what happens to the American currency?  What happens to American credibility in global financial markets?  We could lose a lot more than people realize if we have to start printing money to cover the gap, and the worst part is who might fill the vacuum:

What would a world with the United States in the second financial tier of nations mean? We would have significantly less foreign investment, to start, and that has other implications besides just the impact to our economy. We rely on economic engagement with other nations as a not-inconsequential portion of our national security and foreign policies. …

Without a strong military presence around the world, which would almost certainly disappear just as Great Britain’s did after World War I, the world would be a much different – and more dangerous – place. No nation could guarantee trade security to the extent the American Navy does. Piracy has already become a problem, and without either a massive British or American Navy to suppress it, it would expand enormously. That will aggravate the problems an American return to second-tier status would create in the global economy.

Perhaps another nation could fill the vacuum left by an American collapse, but which nation? What kind of world would global dominance by China, India, or Russia bring, assuming any of these could take that role? How about a coalition of oil producers like OPEC, who have the means to fund it?

Once in a while, I like to engage in a little speculative thinking.  Believe me, this is a scenario I’d love to see remain hypothetical, but right now, we’re squandering the very basis of our power, and in ten years, it may be far too late to correct our course.


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Comments

The US will not just quietly slip into second-tier status. That’s a pipe dream. Either we will stay in the lead or we will violently implode, with unpredictable consequences. There are many different reasons for this, but just understand that this is how the situation really is.

progressoverpeace on May 28, 2009 at 8:50 AM

I hope by implode you mean, “Secede”. What I would give to start up a new nation which hearkens back to the era of true Federalism and Constitutionalism.

Tim Burton on May 28, 2009 at 1:17 PM

I hope by implode you mean, “Secede”. What I would give to start up a new nation which hearkens back to the era of true Federalism and Constitutionalism.

Tim Burton on May 28, 2009 at 1:17 PM

Oh and I want to see us go back to Austrian Economics…

Tim Burton on May 28, 2009 at 1:18 PM

I hope by implode you mean, “Secede”. What I would give to start up a new nation which hearkens back to the era of true Federalism and Constitutionalism.

Tim Burton on May 28, 2009 at 1:17 PM

What would you change to ensure that your new nation couldn’t be undone from the inside in the same way that Western nations have been undone in the past few decades.

Any nation that allows power (political, economic, physical) to transfer to people who are unfit to have it, will inevitably collapse from within. This has been the undoing of the ‘liberal democracies’. Consequently it is necessary to determine who is ‘fit’ to hold various powers and ensure that power is only held by those who are ‘fit’.

Who will be ‘fit for power’ in your new nation, and how will you enforce it?

YiZhangZhe on May 28, 2009 at 1:32 PM

Alas Babylon.

AnotherOpinion on May 28, 2009 at 1:42 PM

I do not often comment here, but I have to add something others may have missed. Where do the other countries get their money? From us. The reason China and to a lesser extent India have money is all the stuff we buy from them. If we are no longer a financial superpower, where is the rest of the world going to get its money? The EU appears to be the only economy that is close to ours. Russia China and India are behind us by a factor of 10. If we fall we will take a lot of the world down with us.

Vmaximus on May 28, 2009 at 1:43 PM

Not just Obama, but many in his administration and those who voted for him, do not believe in American exceptionalism, or desire an American leadership position around the world.

Star20 on May 28, 2009 at 2:06 PM

Who will be ‘fit for power’ in your new nation, and how will you enforce it?

Term limits for one. Pure democracy for another. Not this representative nonsense where once elected they can do as they please for four years. All major decisions decided by plebiscite and referendums. Also, lawyers not eligible for political positions. That would eliminate the majority of today’s politicians. And of course, little if no federal powers. No income tax. The federal government controls the military and that is it.

There are lots of things that could be done to avoid the mistakes America and other countries have made.

keep the change on May 28, 2009 at 2:12 PM

Oh and I want to see us go back to Austrian Economics…

Tim Burton on May 28, 2009 at 1:18 PM

America was never run according to Austrian economics. Monetarism is a completely separate school.

hicsuget on May 28, 2009 at 4:40 PM

Not just Obama, but many in his administration and those who voted for him, do not believe in American exceptionalism, or desire an American leadership position around the world.

Star20 on May 28, 2009 at 2:06 PM

In other words, they all want the United States to fail. How patriotic of them!

Del Dolemonte on May 28, 2009 at 5:56 PM

Who will be ‘fit for power’ in your new nation, and how will you enforce it?
YiZhangZhe on May 28, 2009 at 1:32 PM

Same as in the original Constitution: Only land owners can vote, and only land owners pay taxes.

It was the Amendments of the early 20th Century that screwed up the Constitution and, ultimately, America.

If we had it to do over again, there would only have to be a few changes to the original – for example, get rid of the first 9 Amendments, and make some pretty strict limits on what eventually turned out to be The Most Dangerous Branch of our government.

logis on May 28, 2009 at 5:59 PM