- History
- Military
- Revitalizing History
To sum up my previous three essays for Military History in the News: In the next decade, we face the merging of two crises of our own making. First, our national debt will crash the economy. No nation can borrow more every year and maintain a stable currency. We have only ourselves to blame for reaching that precipice. Our politicians reflect our will. Nothing will be done to avert the debt collapse because a majority of voters favor the entitlements conferred by the borrowed money.
When debt service exceeds about 23% of revenues in next decade, then bond holders will demand higher yields. The Federal Reserve will step in to provide the liquidity, but at a cost of letting loose hyperinflation. Only during that chaotic period of, say, a month’s duration, will Congress bitterly debate cutting entitlements and/or raising taxes. It’s a 50-50 bet Congress will refuse to pass sensible legislation. If it remains deadlocked, our standard of living will plummet.
“The U.S. is steaming toward an (economic) crisis that much of Washington would prefer to ignore,” concluded a Wall Street Journal editorial. “It’s as if they (Congress) are on the Titanic, and they’ve spotted the iceberg, but both parties have promised never to touch the tiller. Instead, they’re yelling down to the boiler room with orders to shovel in more coal (more borrowed money), while hoping the passengers have enough entertainment to keep their minds on something other than what’s dead ahead.”
As our debt rises like a towering wave, our Democratic senators closed the government in a demand for $350 billion not authorized by the winning side in the election. The Democrats have created a huge constituency that demands ever more money. There are not the Congressional votes to prevent more borrowing. The debt crisis will be addressed only after it strikes.
The related crisis is China’s aggression. There can be no enduring accommodation between two nations with global reach and antagonistic creeds. As Professor Graham Allison has expressed it, “when a rising power threatens to displace a ruling power, the resulting structural stress makes a violent clash the rule, not the exception.” Our nation thus faces the confluence of two hurricanes: Either our debt implosion motivates Xi to take action, or Xi’s mobilization against Taiwan sparks a fear-driven sell-off of bonds. Either way, for the first time in its history the United States will be coping with financial chaos before the first shot is ever fired.
By mobilizing, Xi will force the U.S. president to decide whether to stand aside or to fight. Our fleet of carriers and surface ships must fight inside China’s engagement zone. Unclassified wargames indicate staggering losses on both sides. Xi believes his society is much more willing to sacrifice. The president, beset by the bond crisis, may blink. If Xi seizes Taiwan with its chip production intact, the Chinese economy will improve, South Korea and Japan will cut deals with China, the U.S. fleet will fall back to Guam, and the dollar will be devalued globally. A new horizon will open. American power will wane.
Unlike the debt crisis, however, we can deter China. As was explained in an earlier essay, we can greatly lessen the odds of China piling on by modifying the mix of our naval force structure. Currently, China can launch thousands of cheap drones or missiles for a fraction of what it costs our fleet to intercept them. That means our fleet must duck and dodge, staying out of range. This limits its offensive strikes, while the volume of cheap incoming drones and missiles increases the odds of severe casualties among the crews of our surface ships.
Were the Navy to put 20% of its annual procurement into AI-equipped drones, missiles, and unmanned vessels, that would amount to $135 billion by 2033. Illustratively, that would add in the battle for sea control sixty unmanned vessels with 40,000 drones and missiles. This reverses the cost-exchange ratio, holding the Chinese fleet of 5,000 surface ships at risk of being destroyed, with few American losses. That would change the calculus of both Xi and the next U.S. president, and the vulnerability of Taiwan would be greatly diminished.
This shift to twenty-first century warfare may not occur. President Trump and several key senators are awed by the majestic, imposing silhouettes of surface warships. They control the budget. For the next three years, they may insist upon building vulnerable ships manned by many sailors—WWII legacy concepts.
We lost in Vietnam, Iraq, and Afghanistan because our Washington leaders assumed we were too rich and powerful to lose. That is called hubris. Because of that arrogance, we won’t address our debt until it is overwhelming us. However, we can deter China by continuing to invest in our technological advantage in twenty-first century warfare. Our engineers have unmatched skill in exploiting the AI revolution. But to date, we have chosen to continue with old concepts and weapons. Let’s change course.
