I tried to explain why I thought there should be as little taxation as possible. I do not argue that it means growth directly, but that it helps to make the allocation of resources more efficient, which helps growth indirectly, by putting economic decisions on a sounder basis. If you are right that there will be no surplus, than maybe things will appear different. However, I think the fundamentals are strong enough to yield an adequate surplus. A lot depends on what one expects in the near term, and you are more pessimistic than I am.
I am sorry, I mention the Europeans only because NATO has been the centerpiece of our defensive alliances. Japan is important too, and there are moves being contemplated to give it a larger role in the region. Some other allies might take a more prominent role eventually. But right now, our leadership is necessary to ensure that the various parties to these alliances can work together, if only because there is still fear of Germany and Japan left over from the Second World War.
The Chinese are our major strategic competitor in the Pacific. That does not mean that they are our enemy, but it does mean that one cannot rule out conflict between the two powers down the road. One of the surest ways of discouraging destabilizing adventurism by the Chinese, in respect of Taiwan or Vietnam, India or Russia, is to show resolve to maintain a strong presence in the region.
The current strategy is, broadly, to be capable of fighting on two fronts, with residual capacity to fight in a third area of conflict if need be. Why? Because we are central to the alliance system that has maintained post- War stability, and an outbreak of serious hostilities one place represents an opportunity to attack elsewhere. To maintain that, we must improve retention, morale, and readiness, as mentioned, but also we must retain our technological edge, which keeps our lead even against more populous potential enemies.
I am not sure what the markets are saying, except that a correction has become a (temporary, I think) panic. |
