Foreign policy analysts and diplomats alike are warning the U.S. to get its fiscal house in order or risk losing more influence on the world stage.
Secretary of State Hillary Clinton describes the debt as a national security issue and wants to put development and diplomacy on par with defense. But her three-D approach faces two troublesome Ds: America's debt and deficit.
"It does constrain us where constraint may be undesirable," she says. "And it also sends a message of weakness internationally."
What's Bad For The U.S. Is Bad For The World
Clinton often reminds audiences that America was stronger abroad when its fiscal house was in order — including when her husband was president.
"It is very troubling to me that we are losing the ability, not only to chart our own destiny, but to have the leverage that comes from this enormously effective economic engine that has powered American values and interests over so many years," she said in September alongside the president of the Council on Foreign Relations, Richard Haass.
"It's bad for the United States," says Haass. "Let me also add that it's bad for the world. I don’t see anyone else stepping up to the sort of role the United States has played in promoting prosperity and stability around the world, and if the U.S. is unable to lead and act in the ways it has in the past few decades — really since World War II — we are most likely looking at an era of international relations in which things get a lot messier."
Haass says it is already harder for the U.S. to preach to the Group of 20 wealthy nations or be seen as an economic role model while countries like China are prospering.
With China holding so much U.S. debt, Haass says it is easy to imagine the U.S. finding itself in a crisis with China — over Taiwan, Korea or Iran, for example.
"China disagrees with something that we are doing, and in order to put pressure on us, suddenly they quietly — or not so quietly — start diversifying some of their financial holdings," Haass says.
No One Can Take America's Place
According to Haass, a Chinese banker could be more of a threat than China's military. It's not that experts are worried that China will take America's place, though.
"There's nobody else to take our place," says Michael Mandelbaum, professor at the Johns Hopkins School of Advanced International Studies.
"China is certainly becoming richer and will become more powerful and will become more influential in East Asia, but I don't see China becoming a global power or assuming the kind of global responsibilities that the U.S. bears anytime soon," Mandelbaum says.
But the U.S. also won't be able to play the kind of role it has in the past, as Mandelbaum points out in his latest book, The Frugal Superpower.
"I believe the kinds of military interventions that the U.S. has conducted over the last two decades — in Somalia, Haiti, Bosnia, Kosovo, Iraq and Afghanistan — are going to be discontinued. Because those military interventions, although initiated under two administrations for differing reasons, they all landed us with the expensive, difficult and frustrating task of nation-building."
Nation-Building On The Cheap Isn't Easy
Administration officials keep saying they need to invest in countries like Afghanistan to make sure they don't fail and become breeding grounds for terrorists. Mandelbaum argues the U.S. just can't afford it.
"It's just too expensive," he says. "I don't think we can do nation-building on the cheap, and in fact, there's some question of whether we can do it at all. So I think we will deal with the threats emanating from failed states, not via nation-building, but rather through intelligence gathering and cruise missiles."
Others are worried about likely cuts in foreign aid, though. Haass, from the Council on Foreign Relations, says we are entering the age of austerity.
"There are times in life you play offense, and there are times in life you play defense. And if I were the State Department, this is one of the times I would be preparing for defense."