It's Foreign Affairs, Stupid

The economy trumps national security as the country’s top political issue this election cycle. With the unemployment rate at 8.2 percent, this is not surprising. From a long-term strategic perspective, however, the two issues are closely connected. The current economic crisis threatens Americans’ standard of living and our capacity to address social problems. It also undercuts the U.S. ability to sustain international stability, a prerequisite for domestic prosperity. The campaign debate we must have is how the United States can deal with global problems while restoring its economic health.

In the near term, lackluster growth and ballooning deficits mean fewer resources for national security, including defense, diplomacy, foreign assistance and development. Economic challenges and dissatisfaction with the Iraq and Afghanistan wars are prompting Americans to turn inward. Pressure to reduce the international burden is growing even as U.S. influence is declining. What is worse, these domestic constraints arise at a time when problematic trends abroad are limiting our options or creating greater demands for U.S. action.

Consider some key challenges: first, traditional U.S. allies seem less and less willing to step up to mutual-defense needs. The United States has complained for decades about Europe’s underinvestment in its defense and its lagging contribution to joint efforts. As the Europeans renegotiate their political and economic priorities amid the current fiscal and monetary crisis, NATO countries are likely to spend even less on defense or new NATO missions. European defense spending fell by close to 2 percent in 2011, with countries hit hardest by the sovereign debt crisis seeing more drastic cuts: Greece, 26 percent since 2008; Spain, 18 percent; Italy, 16 percent; and Ireland, 18 percent. By 2015, Britain and Germany, two of the top three European defense spenders along with France, plan cuts of 7.5 percent and 10 percent, respectively. France, if its withdrawal from Afghanistan is any indication, also will retrench in the coming years under its new socialist leadership.

In Asia, meanwhile, our strongest ally, Japan, is suffering from political gridlock and a crisis of confidence following the tsunami, nuclear accident and rapid rise of its regional rivals, particularly China.

Second, the United States cannot rely instead on emerging powers as they do not share, for the most part, U.S. views across a range of international-security issues. Rising powers such as China, India, Brazil, Turkey and Indonesia leverage their economic growth to modernize their militaries, press regional claims and demand greater representation in international bodies. But they don’t see themselves as stakeholders in the American-led international order. Rather, they show little inclination to share in the burdens of providing the collective goods needed to maintain security, enable global commerce and make international institutions work. The United States should seek cooperation with emerging powers on issues of mutual interest, but the absence of strategic like-mindedness will inhibit the emergence of fully integrated alliances. The divergence of interest among great and rising powers thwarts agreement on matters of substance at bodies such as the G-20.

Third, key regions are experiencing destabilizing transitions, particularly in the greater Middle East. The transnational terrorist threat from the Afghanistan-Pakistan region endures. Iran’s nuclear program threatens a cascade of proliferation. Prospects are real for a sectarian war between Sunni and Shia forces in Iraq, Syria and the Gulf, fueled by regional powers such as Iran, Saudi Arabia and Turkey. The most significant great powers outside the region—America, Europe, Russia, China and India—can’t agree on how to address these challenges.

The United States cannot afford to be indifferent to these problems, yet it lacks the resources to address them. The country’s fiscal health must be its top priority. Continuing with low growth and large deficits while economically dynamic rising powers expand their military capabilities will undercut U.S. leadership over time. These trends would culminate in a multipolar world like that of the nineteenth and the first half of the twentieth centuries. A multipolar world would increase the likelihood of war among major powers. The lesson of the twentieth century is that nothing is more expensive than such conflicts. So addressing the economic underpinnings of U.S. power is vital.

Two recent reports offer starting points for reform. The report of the Simpson-Bowles commission, appointed by President Obama in 2010, recommends a combination of cuts in domestic discretionary spending, revenue-increasing tax reforms, and controls on health-care costs and entitlements that could save $4 trillion over ten years. And in its study of “Fortune 500” companies, a report by the Partnership for a New American Economy found that the United States could exploit the already substantial contribution of immigrants by offering more green cards and visas for graduates with advanced degrees, entrepreneurs and highly skilled workers.

In addressing its international challenges, America must embrace five critical adjustments:

1. Preventive diplomacy: the United States should address security challenges early to prevent later needs for military action. The classic case is Afghanistan after the Soviet withdrawal in the 1990s. A focused diplomatic effort supported by investments in state building and reconstruction could have precluded the power vacuum and civil conflict that led to 9/11.