Is A Weaker U.S. Part Of Debt Deal?
Posted 06:36 PM ET
http://www.investors.com/NewsAndAnalysis/Article/582013/201108181836/What-Is-Biden-Doing-In-China-.htm
National Security: With his boss on vacation, Vice President Joe Biden has a very important job to do. He's in China, begging communist officials to please keep buying our bonds. If they do, what's he giving them in return?
Sending Biden to China, pardon the phrase, raises red flags about what we might commit to while he's there. What is Biden, the gaffemeister in chief, authorized to give the Chinese?
Officially, the White House says Biden's in China to sell its leaders on the U.S. debt-ceiling deal that will trim $2.5 trillion from the expected deficits of $10 trillion over the next decade.
But with S&P downgrading us from AAA to AA+ just a week ago, Biden wouldn't seem to have much standing to argue that it's a good deal. Fiscally, we've never been in worse shape. So how can Biden persuade the Chinese — who already hold $2 trillion or so in dollar-based assets — that more debt is a good deal for them?
Will he tell China's apparatchiks that a half-trillion, maybe more, of the cuts in the debt deal come out of defense? Or that the cuts were so severe that even new Defense Secretary Leon Panetta has warned of going too far — and possibly hollowing out the military? If so, China may agree it's a good deal.
The administration has signaled as much. On the eve of Biden's trip, the White House suddenly announced it wouldn't sell F-16 jets to Taiwan — a huge strategic favor to the Chinese. Was there a quid pro quo?
Explicitly or not, the U.S. seems to be offering them a deal — buy our bonds and pay for our out-of-control spending, and we'll let you build a massive military presence and expand your influence in the Western Pacific.
China might see that as a good investment, one that will deliver them one of their much-cherished, long-term strategic goals: a weaker U.S. military.
Subscribe to the IBD Editorials Podcast That nation is already challenging the U.S., increasing defense spending at double-digit rates year after year, in what a U.S. Air Force website recently called "the most remarkable expansion of military power since the U.S. geared up for World War II."
Meanwhile, the U.S. defense budget, in the words of Heritage Foundation analyst Charles Morrison, is in "a rapidly escalating free fall."
China is busy building a blue-water navy to challenge America, and just this month it launched its first aircraft carrier, with plans for more. It already has 2 million men under arms — a third more than the U.S.
At the same time, it's building its unconventional warfare capabilities, extensively testing anti-satellite weapons and, according to computer security firm McAfee, engaging in a massive, five-year cyberattack on at least 50 U.S. government agencies and corporations.
China's new generation of anti-ship and anti-aircraft missiles, submarines, sophisticated new radar and minelayers is premised on what Defense Department wonks call "anti-access and area denial."
In plain language, that means forcing us out of East Asia, leaving allies such as Taiwan, Japan and South Korea unprotected.
Some deal. They buy our bonds while we watch their defense buildup. Clearly, China's preparing for conflict. What are we preparing for? National bankruptcy?
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