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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: Peter Dierks who wrote (20358)	6/7/2007 12:27:19 PM
From: TimF	Read Replies (1) \| Respond to of 71588

The "overstretch" to the extent that it exists, is exaggerated by this article. US federal debt, and deficits, maybe be a bit higher than I'd want, but as a percentage of GDP are unexceptional compared to other countries, and the deficit has been coming down. Eisenhower's genius was to steer a middle course between the competing demands of an insatiable "military industrial complex" and an often irresponsible tax-cutting Congress. By restraining military spending and maintaining sensible tax levels, Ike made certain that the U.S., unlike its Soviet rival, waged the Cold War without ever losing its fiscal cool. The tax levels that Eisehower maintained where not particular sensible, esp. the highest marginal rates, which where harmful, even to the point of actually reducing government income. I agree with the part near the end "Such arguments have, of course, been heard before. In 1987, for example, the Yale historian Paul Kennedy warned of the effects of American "overstretch." As the Cold War reached its expensive climax, this pessimism was not unintelligible. The puzzle is that, by contrast, the U.S. today is far from overstretched by the costs of its military commitments. Indeed, seldom in the past 50 years has being a superpower been cheaper. That observation may surprise those readers who have seen alarmist estimates of the total cost of the war in Iraq, like the $2.2 trillion figure recently calculated by the economist Joseph Stiglitz. Yet even Mr. Stiglitz's figure, which is a projected total for the entire period from 2003 to 2015, is dwarfed by the vast size of the U.S. economy. With annual gross domestic product in excess of $13 trillion, the U.S. can readily afford to fight more than one small war--and, compared with the world wars, Korea and Vietnam, what is going on in Iraq and Afghanistan today is pretty small. Still not convinced? Just consider the long-run U.S. defense budget as a percentage of GDP. In the 1960s, it averaged 8.4%; in the 1970s, 5.6%; and in the 1980s, 5.7%. Under President Bush, however, it has averaged 3.6%. We flatter al Qaeda when we bracket it along with the Red Army. The fiscal problem today, as Mr. Hormats acknowledges, is not so much national security as Social Security--to say nothing of Medicare and Medicaid. Between them, these are the programs that threaten to undermine the long-term fiscal health of the U.S. as the baby boomers retire. In other words, the danger today is not external but internal overstretch."