US in Decline – and Australia?
There is a whole specialist literature on whether America is in a period of decline. Speaking in Melbourne’s Sofitel Hotel to a lunch of 410 guests of the Saxton’s Speaker’s Bureau, I said the rise of China and the decline of America would be debated in this country for the next 20 years.
That’s a picture of slick celebrity historian Niall Ferguson on the screen. I quoted his view that sometimes the decline of an empire can come suddenly, generally as the result of a fiscal crisis, as quick and as fast “as a thief in the night.” It need not be a centuries-long, drawn-out decline that people imagine had been the fate of the Roman empire in late antiquity.
Ferguson said imperial decline is usually related to the fiscal crisis. I described America’s $14 trillion of national debt and the political deadlock in Congress about action to reduce long term entitlements and increase taxes, the only serious way of reining it in. In the US Congress the Republicans can’t accept tax increases, even doing away with the Bush tax cuts, and the Democrats can’t accept reform of Medicare or an increase in the retirement age even if as far off as 2050. But in the next presidential term they will have to move, or America will be tipped into a period of high inflation and high interest rates.
In this context it will have no alternative to cut back on bases and the military. Indeed it is already doing so. The Chairman of the Joint Chiefs, Admiral Mike Mullen has said the fiscal crisis is the biggest threat to American security. Not Al Qaeda, not Iran, not Pakistan, not North Korea, but the spending and borrowing locked in by the American system, and its chronically slow to move, politically-deadlocked and short-termist Congress.
With the rise of China to superpower status Australia is required, in Hugh White’s language, to take foreign affairs and defence seriously for the first time in a long time. That may mean dealing with China on security in the context of an American retreat from Asia. Not on the cards now, but a sudden lurch towards fiscal crisis could make Ferguson’s point ring very true for Australians – a crisis for an empire coming without warning, “like a thief in the night.”