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July 13, 2012

This Week In Threat Mongering - The Debt Version
Posted by Michael Cohen

Bart-scaredIn the world of hysterical, threat-mongering about US national security there are few issues that produce more solemn and serious head-nods than the issue of America's growing national debt.

Ever since then-Chairman of the Joint Chiefs of Staff Mike Mullen declared two years ago that the national debt "is the number one national security issue," agreement with this assertion has become some sort of entry route to "foreign policy seriousness" for pundits and policymakers alike.

This is strange because the idea of taking strategic advice from Mike Mullen is a bit of a head scratcher - taking economic advice from him is almost impossible to fathom.

And yet here, last week, was not one, but two Brookings Fellows, writing in the Los Angeles Times that Mullen was right - debt is the number one national security issue in the country. They are not alone, it's a view that receives broad political support. Here's Congressman Mo Brooks of Alabama; Congressman John Culberson of Texas, Senator Rand Paul of Kentucky; Cong. John Campbell of California, Cong. Adam Smith of Washington and even Richard Haass, head of the Council on Foreign Relations all making the same argument. It was a topic of discussion in last year's CNN national security debate where it was endorsed by Jon Huntsman.

The argument that debt is a national security threat is based on the notion that if the US becomes too deeply mired in red ink it will be unable to field a world class military; "there would be continued loss of confidence in America" says Mullen; our allies will begin to doubt American resolve; America's foreign alliances will crumble . . . and before you know it cats will be sleeping with dogs, there will be an Islamic caliphate in the Middle East and we'll all be eating lo mein for dinner.

Quite helpfully, O'Hanlon and Lieberthal have provided the most divorced from reality example of this argument:

American economic weakness undercuts U.S. leadership abroad. Other countries sense our weakness and wonder about our purported decline. If this perception becomes more widespread, and the case that we are in decline becomes more persuasive, countries will begin to take actions that reflect their skepticism about America's future. Allies and friends will doubt our commitment and may pursue nuclear weapons for their own security, for example; adversaries will sense opportunity and be less restrained in throwing around their weight in their own neighborhoods. The crucial Persian Gulf and Western Pacific regions will likely become less stable. Major war will become more likely.

This is truly a chunky, threat-mongering stew of fact-free assertions, breathless fear-mongering and worst case scenarios that ends up where these types of arguments always do - in a more insecure world all because of a lack of American commitment to global hegemony.

The fact is, if last year's debt limit debacle hasn't already convinced other nations to be skeptical of America's future then I think we're probably in the clear. Of course, the debt limit debate is instructive in this regard. Even though both parties agreed to a mandated reduction of the defense budget, which would basically return the Pentagon budget to FY 2007 levels (or what some might call, non-crazy levels of spending), the ink was barely dry on the agreement before both parties began falling over themselves to restore the cuts. The House of Representatives even went so far as to take a sledgehammer, earlier this year, to key social safety net programs in order to prevent the Pentagon from taking a haircut. Secretary of Defense Panetta practically ran around Washington with his hair on fire decrying the impact of sequestration cuts. 

O'Hanlon and Lieberthal's predictions of doom are fanciful at best and are based on the notion that the world is a dangerous place when in fact it's never been safer. But even if they are right that their calamitous series of events could occur there are about $690 billion reasons to believe that the sort of defense cuts that would lead to this series of events will never happen - especially when the country can rely on esteemed national security experts to convince Americans that if it were to occur the world would descend into a dystopian state. 

But that isn't even the worst part of the debt is a national security threat argument - O'Hanlon and Lieberthal, as well as pretty everyone else who makes this assertion, don't appear to understand the difference between debt and economic growth. Yes, America's economy is weak; but it has very little to do with the fact that we have a lot of debt. 

Indeed, the problem is that the federal government hasn't taken on enough debt in order to grow our economy, create jobs and pull ourselves out of the worst economic downturn since the Great Depression. Quite simply, the government has failed at one of its most basic responsibilities in the face of economic calamity - spending money (even that which is borrowed) in order to fill the gap in aggregate demand. As Ezra Klein rightly points out, the world is desperate to loan us money so that we can spend it on important national priorities, rebuild out infrastructure and create jobs. Instead we have folks telling us that we should reducing out debt . . . and that it's a national security priority.

So while debt-mongers are right to be concerned about America's economic future, their diagnosis is way off-base. 

Indeed a greater focus on reducing the national debt will mean less resources to grow the economy, less money for infrastructure, less money for improving our education system and less money to support clean energy initiatives . . . unless O'Hanlon, Lieberthal, Haass and Mullen believe that cutting government spending to reduce the deficit will somehow grow the economy. It won't. Instead it will make things worse. 

In fact, the misguided focus on debt is a good part of the reason that our economy remains so weak; we've devoted so much energy to worrying about the debt that we are supposedly leaving for our grandchildren that we forgot to think about the terrible economy and high unemployment that we are bequeathing to Americans today - and utilize the tools at our disposal to make this situation better.

In the end, "restoring U.S. economic strength" should be a top priority of US policymakers. But focusing on the debt as a means to achieve that goal is the best example I can think of as to why defense wonks and Naval officers should stay away from economic analysis in general. 

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