Arnold Ahlert / July 17, 2017

Fiscal Recklessness Undermines National Security

Options for dealing with North Korea are limited by not just China but the economic decisions of the American people.

On Independence Day, North Korea successfully launched an ICBM capable of reaching Alaska. What the Trump administration and Congress do about it, and what the American public is willing to countenance to prevent nuclear war, or an electromagnetic pulse (EMP) attack that could cripple our power grid, will reveal much about the character of our nation.

“For all the talk of this being the land of lousy options, I think there are a lot more options than we usually discuss,” Dr. Nicholas Eberstadt, an international security expert at the American Enterprise Institute, said regarding North Korea.

Aside from the military components of deterrence and defense, including the Terminal High Altitude Area Defense system (THAAD) that recently passed its 14th successful test in a row, the U.S. should redouble efforts to push other nations to help enforce UN resolutions and sanctions against North Korea.

Historian Victor Davis Hanson envisions a Marshal Plan-like project whereby Australia, Japan, South Korea, Taiwan, and the U.S. “coordinate a massive missile-defense project aimed at ending North Korean assumptions that even one of its missiles has a chance to reach its intended target.” Hanson further notes the effort would let China know its own nuclear deterrent “could be compromised and nullified by the defensive efforts of its immediate neighbors.”

More important, the Trump administration has to disabuse itself of any notions that China, absent effective pressure, will do anything to mitigate the behavior of North Korean leader Kim Jong Un. North Korea not only represents the quintessential cat’s paw willing to antagonize America and our Asian allies, but it’s an extra layer of Chinese border protection. A united and democratically inclined Korea would greatly imperil that benefit.

Thus, the feel-good meeting that took place between President Donald Trump and Chinese President Xi Jinping at Mar-a-Lago in April, during which the president was made to believe China would rein in its unruly client, is no longer operative.

To its credit, the administration recognizes that reality. How far it is willing to go to change the dynamic remains to be seen. As Newsweek’s Bill Powell reveals, trade between North Korea and China “is dominated by just a handful of large companies, several of which are based in Dandong.”

The administration asked China to crack down on 10 of them in June, but U.S. and allied intelligence analysts believe China’s reticence to do so is either about maintaining the aforementioned divided Korean peninsula or managing internal politics prior to the once-in-every-five-years convening of the Communist Congress this fall. “President Xi Jinping and his political allies don’t want to make more enemies of powerful businessmen, many of whom are already angry at China’s anti-corruption drive,” Powell explains.

In the meantime, the Chinese Foreign Ministry is claiming Beijing has played an “indispensable” role in denuclearization efforts.

Reality suggests otherwise. There’s been a 10.5% increase in trade with Pyongyang in the first half of the year, and China has accounted for a whopping 80% of North Korea’s external trade over the last five. China insists that trade is part of its normal relationship with North Korea, and therefore doesn’t violate UN sanctions applied to Kim Jong Un’s regime. China also insists the U.S. should engage North Korea directly.

It’s not flying — sort of. Last Thursday, Reuters reported the Trump administration “could impose new sanctions on small Chinese banks and other firms doing business with Pyongyang within weeks, two senior U.S. officials said.”

Yet those officials referred to the targeted entities as “low-hanging fruit” and “shell” companies linked to Kim’s nuclear and missile programs. By contrast, larger Chinese banks would remain untouched for now.

Nonetheless, Chinese Foreign Ministry spokesman Geng Shuang rebuffed such efforts, claiming America was “abandoning one’s benefactor upon achieving one’s goal” of Chinese help in passing UN resolutions against North Korea. Shuang further insisted that what China enforces “is United Nations resolutions, not the domestic law of certain countries.”

So what would constitute effective pressure against the Chinese? In a perfect world, a threat to deny them access to U.S. markets. In 2016, America and China engaged in $648.2 billion in goods and services trade. The exchange was overwhelmingly in China’s favor: U.S. exports were $169.3 billion, and imports were $478.9 billion, leaving America with a goods and services trade deficit of $309.6 billion.

Enter the American public, one with a healthy appetite for cheap imported goods, even if they include the occasional poisonous pet food or toxic drywall. Cheap imports are also made possible by a Ruling Class whose addiction to deficit spending has allowed China to amass $1.092 trillion in current U.S. debt holdings.

In short, helping our adversary flourish — and eviscerating a large degree of leverage we might otherwise have as a result — is easier than being fiscally responsible.

Americans must ostensibly abide this contemptible status quo, because any disruption of it could produce some level of economic downturn, ranging from recession to depression. No doubt that is true, but it avoids a critical question: Why do we abide fiscal recklessness if it threatens national security? How appealing is a stable economy and/or cheap consumer goods if the price tag for either or both includes the possibility of a nuclear attack or an EMP blackout?

There is little doubt the globalist faction of American politics and business prefers such a question never be asked, much less answered. Yet how tough a Trump administration and Congress gets with China — amidst the inevitable caterwauling of corporate interests and, quite frankly, a portion of the American public as well — will be quite revealing.

Unfortunately, our Ruling Class apparently remains infuriatingly predictable. For the first time in the nation’s history, federal spending topped $400 billion for a single month, when the Treasury laid out $428.8 billion in June. Intake was approximately $338.6 billion — meaning that America ran a deficit of more than $90 billion in just 30 days.

It gets worse. So far in FY2017, which began Oct. 1, the nation has added another $523 billion to the national debt. And while both parties bear the lion’s share of the blame, an American public that abhors fiscal recklessness — but adores “their share” of welfare state entitlements that engender the vast majority of it — cannot be excused.

In other words, our increasingly unpleasant options with regard to China and its North Korean lackey do not occur in a vacuum. Americans can deny it all they want, but we have grown tolerant — or outright supportive — of mortgaging the future to pay for the present. And while it is convenient to think of that grossly irresponsible behavior solely in economic terms, its effect on national security is far more problematic.

We have a number of adversaries in the world. (Ultimately, Iran will be even more of a dilemma than North Korea.) But perhaps none of them work against American interests more than Americans themselves.

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