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Fortress America—The Only Alternative To Fiscal Ruin
David Stockman

That didn’t take long. Twelve days after Biden signed the ballyhooed legislation unfreezing the nation’s $31.4 trillion debt ceiling, the public debt crossed the $32 trillion mark on June 16th. And that was only nine months after it crossed the $31 trillion level in October 2022.

For that matter, by this date in 2033 the public debt is guaranteed to be above $55 trillion. The $1.5 trillion of alleged “cuts” in the McCarthy-Biden debt bill were phony as a $2 bill and won’t make a damn bit of difference to the $25 trillion of new public debt that is baked into the budgetary cake over the next decade.

Then again, who is counting, anyway?

Certainly, not anyone in Washington. The Dems never really cared very much about the debt and the GOP long ago forfeited its bone fides as an agent of fiscal rectitude. That happened when a perverted form of supply-sideism became an excuse for big tax cuts financed with large gulps of public debt.

But since the turn of the century the GOP has really gone AWOL on its core job in American democracy, which is to function as the sentinel of fiscal responsibility. After all, the Dems long ago acquired the axe on the Welfare State—so what’s the point of the GOP being in the “me too” business?

Now, however, it’s far worse than the post-war “me too” party of Nelson Rockefeller and Chuck Percy. The present day GOP was hijacked a few decades ago by a loathsome tribe of born-again Trotskyite statists, who discovered that a perpetual state of global war was the true passageway to political power and aggrandizement of the state. We are speaking of the neocons, of course, and the GOP’s ranks of residual cold warriors who never figured out that when the Soviet Union disappeared into the dustbin of history in 1991 that the military requirements for national security shrank drastically.

That is to say, in the present world order there are no technologically-advanced industrial powers who have either the capability or intention to attack the American homeland. To do that you need a massive land armada, huge air and sealift capacities, a Navy and Air Force many times the size of current US forces and humongous supply lines and logistics capacities that have never been even dreamed of by any other nation on the planet.

You also need an initial GDP of say $50 trillion to sustain what would be the most violent conflagration of weaponry and material in human history. And that’s to say nothing of being ruled by suicidal leaders willing to risk the nuclear destruction of their own countries, allies and economic commerce in order to accomplish, what? Occupy Denver?

The entire idea that there is a post-cold war existential threat to America’s security is just nuts. For one thing, nobody has the GDP or military heft. Russia’s GDP is a scant $1.8 trillion, not the $50 trillion that would needed for it to put invasionary forces on the New Jersey shores. And its defense budget is $75 billion, which amounts to about four weeks of drippings from Washington’s $900 billion monster.

As for China, let us not forget that even its communist rulers sill believe it is the “Middle Kingdom” and therefore already occupies the most important territory on the entire planet. Why would they want to patrol Cleveland OH or Birmingham AL to root out dissenters from Chairman Xi’s thought?

More importantly, they don’t have the GDP heft to even think about landing on the California shores, notwithstanding Wall Street’s endless kowtowing to the China Boom. The fact is, China has accumulated in excess of $50 trillion of debt in barely two decades!

Therefore, it didn’t grow organically in the historic capitalist mode; it printed, borrowed, spent and built like there was no tommorrow. The resulting simulacrum of prosperity would not last a year if its $3.6 trillion global export market—-the source of the hard cash that keeps its Ponzi upright—were to crash, which is exactly what would happen if it tried to invade America.

To be sure, its totalitarian leaders are immensely misguided and downright evil from the perspective of their oppressed population. But they are not stupid. They stay in power by keeping the people relatively fat and happy and would never risk bringing down what amounts to a colossal economic house of cards in order to do what? Bomb America’s 4,400 Walmart stores, which are their economic lifeblood?

And the nuclear blackmail card can’t be played, either. By the US government’s own reckoning the annual cost of maintaining and investing America’s triad nuclear deterrent—-submarine launched ICBMs, land-based ICBMs and the strategic nuclear bomber fleet—is about $60 billion per year or just 7% of the current US defense budget.

At the end of the day, that’s what dissuades both Moscow and Beijing from attempting nuclear blackmail and therefore invasion by nuclear checkmate. That is to say, America’s security lies in nuclear deterrence— the linch-pin called MAD (mutual assured destruction) that has worked for 70 years. And it worked even at the peak of the cold war when the Soviet Union had 40,000 nuclear warheads and leaders far more unstable than either Cool-Hand Vlad or Xi Jinping.

At the end of the day, it is the great ocean moats, the triad nuclear deterrent and the relative economic diminutiveness of Russia and China that keep the American homeland secure and safe from hostile foreign encroachment. Most of the rest of the massive $900 billion defense budget is based on false predicates, fabricated threats and the budget-grabbing prowess of its own marketing (i.e. think tanks) and advocacy (i.e. defense contractors) arms.

For instance, why in the world do we still have NATO 32 years after the Soviet Union perished?

The only real answer is that it is a mechanism to sell arms to its 30-member states. Indeed, Europe had long ago proved it did not really fear that Putin would be marching his armies through the Brandenburg Gates in Berlin. That’s why Germany spent only 1.4% of GDP on defense, and was more than happy to buy cheap-energy via Russian delivered pipeline gas.

Moreover, Germany’s current quasi-warlike posture vis-a-vis Russia is actually not what it is cracked-up to be by the US pro-war media. The truth is, the German Green Party— which is what keeps the Scholz social democrat government in power—has gone full retard war-mongering for the most hideous of reasons: To wit, the Greens live to end the era of fossil fuel, and what better way to do it than cut off the cheap oil and gas supplies from Russia on which Germany’s fossil-fueled economy is based.

Likewise, one thing anyone who has read a smattering of European history knows is that Russians and Poles hate each other and have for a good long stretch of wars and bloody altercations. So Vlad Putin may not be a Russian Gandhi, but he is sure as hell way too smart to attempt to occupy Poland. Ditto France, Germany, the Low Countries, Iberia and the rest.

In short, Washington doesn’t need NATO to protect our allies in Europe because they are not facing any threat that can’t be handled by their own ways and means, preferably of the diplomatic variety. In fact, the whole disaster in Ukraine today is rooted in the War Party’s mindless expansion of NATO in violation of all of Washington’s promises to Gorbachev to not expand it an inch to the east in return for the unification of Germany. Yet NATO now includes all of the old Warsaw Pact nations and even attempted to extend its reach to two of the former Soviet Republics (i.e. Georgia and Ukraine).

Can the same thing be said of America’s so-called allies in East Asia?

Why, yes it can. Just as the definitely not sacrosanct borders of Ukraine where drawn by long dead Soviet tyrants (i.e. Lenin, Stalin and Khrushchev) and therefore have no bearing on America’s security, the same is true of Taiwan.

Chiang Kia-Shek lost the Chinese civil war fair and square in 1949, and there was no reason to perpetuate his rag-tag regime when it retreated to the last square miles of Chinese territory—the island province of Taiwan. The latter had been under control of the Chinese Qing Dynasty for 200 years thru 1895, when it was occupied by the Imperial Japan for 50 years, only to be liberated by the Chinese at the end of WWII.

That is to say, once Imperial Japan was expelled the Chinese did not invade or occupy Taiwan–it had been Han for centuries. It is separated from the mainland today only because Washington arbitrarily made it a protectorate and ally when the loser of the civil war set up shop in a small remnant of modern China, thereby establishing an artificial nation that, again, had no bearing whatsoever on America’s homeland security.

In any event, the nascent US War Party of the late 1940s decreed otherwise, generating 70 years of tension with the Beijing regime that accomplished nothing except to bolster the case for a big Navy and for maintaining vast policing operations in the Pacific region for no good reason of homeland defense.

That is to say, without Washington’s support for the nationalist regime in Taipei, the island would have been absorbed back into the Chinese polity where it had been for centuries. It would probably now resemble the booming prosperity of Shanghai—-something Wall Street and mainstream US politicians celebrated for years.

Moreover, it’s still not too late. Absent Washington’s arms and threats, the Taiwanese would surely prefer peaceful prosperity as the 24th province of China rather than a catastrophic war against Beijing that they would have no hope of surviving.

By the same token, the alternative—US military intervention—-would mean WWIII. So what’s the point of Washington’s dangerous policy of “strategic ambiguity” when the long-term outcome is utterly inevitable?

In short, the only sensible policy is for Washington to recant 70-years of folly brought on by the China Lobby and arms manufacturers and green-light a Taiwanese reconciliation with the mainland. Even a few years thereafter Wall Street bankers peddling M&A deals in Taipei wouldn’t know the difference from Shanghai.

Likewise, we think it is pretty evident that the Chinese do not like the Japanese and the South Koreans do not like the Japanese, and for the same reasons which go back to Imperial Japan and its invasions and occupations of both countries between 1895 and 1945. Yet 75 years have now passed, nationalistic passions have ebbed and all three countries have become booming centers of economic prosperity and modern technologically-based civilization.

To be sure, the War Party on the Potomac can’t seem to understand that most of mankind would prefer peaceful commerce to bloody warfare or even permanent political and military mobilization. So the fact is, the only way these three great Asian nations would go to war today is if it were instigated and funded by Washington.

We’d bet, however, that this is the silver lining of the historic Ukraine fiasco now unfolding. No nation in its right mind—and these Asian folks are self-evidently in their right mind—would volunteer to become a Ukraine-style weapons testing range for the Washington War Party.

In short, there is no need whatsoever for America’s massive conventional armada and its $1.3 trillion annual expense. The latter includes security assistance and foreign aid and the deferred cost of Forever Wars funded through a massive veterans compensation and medical care budget of $250 billion.

Needless to say, the collapse of the Democrat peace wing has made the Washington War Party all the more powerful and dangerous. But without its core hold on the Republican Party even the bipartisan Warfare State would be far less formidable.

Finally, there is one more element gravitating toward fiscal catastrophe. Namely, the fact that the GOP has been thoroughly Trumpified and distracted from its main fiscal mission by the Donald’s utterly misguided border wars and demagogic anti-immigrant howling.

In consequence, the GOP has completely lost track of the massive entitlement threat to future generations. And with the Donald’s loud insistence has even taken a powder completely on Medicare, Social Security and the lesser entitlements. That’s $50 trillion of spending over the next decade and yet the GOP agreed with Joe Biden and the Dems to cut nary a penny in the recent debt ceiling settlement.

But no sooner did they brush themselves off from their shameful surrender on the debt ceiling deal than they were at it again—proposing huge tax cuts with no off-setting spending reductions.

Thus, last week House Republicans proposed a $237 billion tax cut package with a medley of provisions to allegedly bolster the economy and offset the impact of high inflation.

It includes increasing the standard deduction on income taxes, expanding opportunity zones, rolling back some requirements for reporting transactions to the IRS and restoring expired Trump-era business expense write-offs.

Under the new GOP tax plan, the standard deduction for singles would increase by $2,000 to $15,850 and for married couples by $4,000 to $30,700. Accordingly, the chief GOP sponsor proclaimed that the day of the proverbial free lunch has truly arrived:

“With this provision in place, an American family of four will not pay a cent infederal taxes on their first $68,000 of income,” said House Ways and Means Committee Chairman Jason Smith, Missouri Republican.

Let’s see. Has Rep. Smith done the math? Roughly 75% of all US workers earn less than $68,000 and this cat is going to exempt them from paying any Federal income taxes at all, even as the behemoth in Washington is allowed to keep on spending and borrowing like there is no tomorrow?

Of course, there will be a tommorrow, albeit a fiscally disastrous one for which the GOP can share fully in the blame. It is supposed to be the party that keeps Washington on the fiscal straight and narrow, but has degenerated into the party of war spending, tax cutting and entitlement cowardice.

Once upon a time there was a majority of Republicans led by Senator Robert Taft who believed in fiscal rectitude and small government on the Pentagon side of the Potomac, too. Like Joe Kennedy on the Dem side of the aisle, Taft advocated Fortress America, not global hegemony, as the route to homeland security.

His view was right then, and it’s still right now. Besides, it’s the only thing that a financially destitute Uncle Sam can actually afford.




Former Congressman David A. Stockman was Reagan's OMB director, which he wrote about in his best-selling book, The Triumph of Politics. His latest books are The Great Deformation: The Corruption of Capitalism in America and Peak Trump: The Undrainable Swamp And The Fantasy Of MAGA. He's the editor and publisher of the new David Stockman's Contra Corner. He was an original partner in the Blackstone Group, and reads LRC the first thing every morning.

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