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
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
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
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
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.
Schembrie [send him mail]
is a writer who lives in Bellevue, Washington.