Though the mainstream media, Federal Reserve, Congress and the Administration don’t seem to see the same problem with our national debt as the American people do, the US military clearly sees a potential threat to our national security:
With the Obama administration pressing for a government takeover of one-sixth of the U.S. economy to grant health-care benefits to all Americans, the U.S. military is worried that the United States is already losing the ability to afford national defense.
The deteriorating international trade position of the U.S. as documented by the CIA is a national security concern by the U.S. military, according to the Joint Operating Environment 2010 report, or JOE 2010, released Monday by the United States Joint Forces Command, or USJFCOM.
With regard to national defense implications of the deteriorating U.S. economic position, the JOE 2010 worried that should China demand higher interest rates as an inducement to continuing to buy the U.S. Treasury debt needed to finance continuing trillion dollar U.S. federal budget deficits, the U.S. could suffer a “hard landing” that could increase the perception the U.S. no longer controls its financial future.
Noting President Obama’s warning that the U.S. economy will add $9 trillion debt over the next decade, the JOE 2010 warned the result could be “a decreased ability of the United States to allocate dollars to defense.”
“Rising debt and deficit financing of government operations will require ever-larger portions of government outlays for interest payments to service the debt,” the JOE 2010 cautioned. “Indeed, if current trends continue, the U.S. will be transferring approximately 7 percent of its total economic output abroad simply to service its foreign debt.”
The JOE 2010 cited past examples of countries with national debts that exceeded their ability to service debt, leading to serious military implications including Habsburg Spain, Bourbon France and the British government in the early part of the 20th century.
Another, more recent example, is the breakup of the Soviet Union, which some attribute to then Soviet leader Mikhail Gorbachev’s domestic reforms of glasnost and perestroika. While these reforms may have had an impact in the final years of the USSR, the fall of the USSR can be primarily attributed to the fact that the Soviet economy was a complete disaster and they simply did not have enough money to maintain their national defense. Arguably, President Ronald Reagan forced the Soviet hand in national defense when he aggressively expanded America’s military capabilities and the Soviets tried to keep up, with essentially worthless, printed en-masse Rubles.
Hat tip Willie Wonka