John McCain has declared it will be "fine" for US troops to stay in Iraq for a hundred years. The financial numbers, however, indicate that this is strictly bluster. As President, he will either pull out and call it a victory well before his first term ends – or else preside over the bankruptcy of the United States of America.
At $120,000 per family of four, the nine trillion dollar national debt is already forcing Americans to make hard choices between health care, mortgage payments, retirement savings, and college tuition – not to mention gas and food. Imperial war, bequeathing additional trillions of debt, has become one more luxury we can’t afford.
Most Americans have barely noticed the financial bite up to this point, because they’ve fallen into the psychological trap of ignoring the total debt so long as they can make the interest payments. At current low interest rates, the cost of interest payments on the national debt is "only" $400 billion a year, "merely" $1300 per citizen. So if the impact of the total debt is so "minor," why worry about the "increment" caused by war?
Well, unlike the politicians who pose as far-seeing visionaries, we should take a longer view than just to the next election. In twenty years, for example, those debt payments will accumulate to over $100,000 per family of four. Parents complain about the financial burden of raising children, but the national debt will never move out and get a job.
Moreover, the current federal deficit adds a half trillion dollars to the national debt annually, so that within twenty years, the national debt will double. Then the average American family will pay over $10,000 a year in interest payments – on top of their regular taxes.
To avoid this slide into national impoverishment, we need to balance the federal budget by curbing social spending and cutting waste, but unless we also scale back on neocon imperial ambitions, we will soon say good-bye to the American Dream.
Interest rate volatility could change that "soon" to "very soon." As the national debt swells, rising demand on the supply of lending capital drives up interest rates. The higher the rates, the higher the payments, the more temptation for the government to inflate its way out of debt – and the financial markets will compensate for that risk by charging even higher rates. With that kind of runaway feedback, financial collapse (the day we can’t make the payments) could come any time.
Perhaps the classic model for the impending crisis is the US economy in the 1970s and early 80s, when the spending binges of the Great Society and Vietnam War triggered an era of debt monetization (i.e., inflation) that pushed the prime rate and even internal Federal Reserve interest rates to over twenty percent. Such increases today would bury the average family under tens of thousands of dollars a year in interest payments. That would not only be good-bye to the American Dream, but maybe also good-bye to America.
Following the "Vietnam Analogy," how long before today’s financial squeeze crimps the current imperial adventure? Well, the peak of the Vietnam deployment occurred in 1968, and most of the troops were out by 1973. That five-year span indicates, given that the Iraq War’s "Surge" occurred in 2007, our withdrawal must be largely complete by 2012. That is, during President McCain’s first term.
Neocons will counter that the Vietnam Analogy doesn’t apply, and they are right. Things are much worse now. At the end of the turbulent 1970s, the ratio of national debt to GDP was only thirty-three percent; today, we start our Time of Troubles with a debt ratio twice as high. And in the 1970s, it was unthinkable that the US would lose its triple-A credit rating; today, it’s under solemn discussion. Given how much closer we are now toward insolvency, we don’t have the luxury of taking anywhere near as long to get out of Iraq as we did in getting out of Vietnam.
True, in his presidential campaign, McCain’s strategy has been to pander to the warmongering impulses and imperialist lustings of the neoconservative base with the promise of perpetual aggression no matter the cost. Once McCain is President, however, he must quickly submit to economic reality, and that means: Pull Out And Call It A Victory.
What if McCain stubbornly decides to "stay the course" in Iraq regardless of the impact on the US economy? Again, the Vietnam Era offers a lesson.
Like our Unitary Executive today, Richard Nixon was perceived as an Imperial President above the law. Then came high unemployment and double-digit inflation. When public rage exploded, Nixon was hustled from office on a legal pretext that in more stable times would have been readily overlooked. Nixon, by the way, for the most part did get us out of Vietnam – just not fast enough to save his presidency.
As President, McCain will either learn that lesson, or repeat it. Either way, pay no attention to what Mister Straight Talk says, because it has absolutely no bearing on what he must do.
March 26, 2008
