After America

Just to clarify: we’re not talking about paying down the federal debt, just keeping up with the annual interest charges on it. Yet within a decade the United States will be paying more in interest payments than it pays for the military—and that’s not because the Pentagon is such a great bargain. In 2009, the United States accounted for over 43 percent of the world’s military expenditures.¹³ So America will be spending more on debt interest than China, Britain, France, Russia, Japan, Germany, Saudi Arabia, India, Italy, South Korea, Brazil, Canada, Australia, Spain, Turkey, and Israel spend on their militaries combined. The superpower will have evolved from a nation of aircraft carriers to a nation of debt carriers. The CBO numbers foresee net interest payments rising from 9 percent of revenue to 36 percent in 2030, then to 58 percent in 2040, and up to 85 percent in 2050.¹⁴ If that trajectory holds, we’ll be spending more than the planet’s entire military budget on debt interest.

But forget mid-century—because, unless something changes, whatever goes by the name of “America” under those conditions isn’t worth talking about.

By 2010, about half our debt was owned by foreigners, and somewhere over a quarter of that was held by the Chinese (officially).¹⁵

What does that mean? In 2010, the U.S. spent about $663 billion on its military, China about $78 billion.¹⁶ If the People’s Republic carries on buying American debt at the rate it has in recent times, then within a few years U.S. interest payments on that debt will be covering the entire cost of the Chinese armed forces. In 2010, the Pentagon issued an alarming report to Congress on Beijing’s massive military build-up, including new missiles, upgraded bombers, and an aircraft carrier research and development program intended to challenge U.S. dominance in the Pacific. What the report didn’t mention is who’s paying for it.¹⁷

Answer: Mr. and Mrs. America.

To return to the president’s declared strategy: “We’ve got a big hole that we’re digging ourselves out of.” Every politician’s First Rule of Holes used to be: When you’re in one, stop digging. If you don’t, as every child knows, eventually you dig so deep you come out on the other side of the world—someplace like, oh, China. By 2015 or so, the People’s Liberation Army, which is the largest employer on the planet, bigger even than the U.S. Department of Community-Organizer Grant Applications, will be entirely funded by U.S. taxpayers.¹⁸ As Bugs Bunny is wont to say when his tunnel comes out somewhere unexpected: “I musta took a wrong turn at Albuquerque.” Indeed. When the Commies take Taiwan, suburban families in Albuquerque and small businesses in Pocatello will have paid for it.

And even that startling scenario is premised on the most optimistic assumptions—of resumed economic growth but continued low interest rates. If interest rates were to return to, say, 5.7 percent (the average for the period 1990–2010), the debt service projections for 2015 would increase from $290 billion to $847 billion.¹⁹ China would be in a position to quadruple its military budget and stick U.S. taxpayers with the bill.

The existential questions for America loom not decades hence, but right now. It is not that we are on a luge ride to oblivion but that the prevailing political realities of the United States do not allow for any meaningful course correction. And, without meaningful course correction, America is doomed.

It starts with the money. It always does. P. G. Wodehouse fans will recall the passage in Right Ho, Jeeves in which Bertie Wooster’s uncle, like many Americans today, is much preoccupied by the Exchequer’s claim upon him:

“Is he still upset about that income-tax money?” asks Bertie.

“Upset is right,” replies Aunt Dahlia. “He says that Civilization is in the melting-pot and that all thinking men can read the writing on the wall.”

“What wall?”

“Old Testament, ass,” snaps Aunt Dahlia. “Belshazzar’s feast.”

“Oh, that, yes,” says Bertie. “I’ve often wondered how that gag was worked. With mirrors, I expect.”