On A Budget, U.S. Faces World As 'Frugal Superpower' When the U.S. was rich, it could afford to be the world's policeman. Now it's strapped for cash, and that might mean a new phase for American foreign policy.

On A Budget, U.S. Faces World As 'Frugal Superpower'

On A Budget, U.S. Faces World As 'Frugal Superpower'

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Michael Mandelbaum is the Director of the American Foreign Policy Program at Johns Hopkins University. Anne Mandelbaum hide caption

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Anne Mandelbaum

Michael Mandelbaum is the Director of the American Foreign Policy Program at Johns Hopkins University.

Anne Mandelbaum
The Frugal Superpower
The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era
By Michael Mandelbaum
Hardcover, 224 pages
List price: $23.95
Read An Excerpt

Back in December, when President Obama announced he was sending additional troops to Afghanistan, he said something we don't hear very often from the White House.

"We can't simply afford to ignore the price of these wars," Obama said, referring to the actual financial cost of America's engagement in Iraq and Afghanistan.

Michael Mandelbaum, a foreign policy professor at Johns Hopkins University, tells NPR's Audie Cornish that's a rare admission for an American president. And it could signal a new phase of foreign policy for the U.S.

Mandelbaum explores the topic in a new book called The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era. He says America's economic troubles are bound to have an effect on foreign policy, especially once the current crunch gets compounded by massive Social Security and Medicare payments to aging baby boomers.

Mandelbaum says much of our foreign policy over the past 60 years has been driven by one thing: The U.S. was rich.

"For almost all of history, almost every country, when it decided on a foreign policy, had to ask first and foremost: How much it would cost?" In contrast, he says, "We've asked: What's right for the world? What can we do to make the world a better place? What international duties do we have?"

Stepping up to answer those larger questions has made America a kind of de-facto global government, Mandelbaum says, providing governmental services that help keep the world more secure and more prosperous.

Take the dollar, for example, which used to serve as the global currency. In addition, Mandelbaum says, "the United States has been the world's consumer of last resort -- and the United States has played a kind of policing role around the world."

But all of that is coming to an end. Soon, we won't be able to borrow enough money to pay out Social Security and Medicare. "When that happens," he says, "people are going to say, 'Yes, we'd like to have as big a defense budget as possible, but if the choice is between paying out the defense budget and paying out what we are owed in Medicare, we're going to opt for Medicare.'"

Defense Secretary Robert Gates has already begun to talk openly about cuts in defense spending, Mandelbaum points out.

"I hope that it will be possible for the United States to continue many of the important international roles that it plays," Mandelbaum says. But he's not very optimistic.

"I do not think we'll be able to do everything we've done for the past several decades."

Excerpt: 'The Frugal Superpower'

The Frugal Superpower
The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era
By Michael Mandelbaum
Hardcover, 224 pages
List price: $23.95

On December 1, 2009, Barack Obama, the forty-fourth American president, delivered a speech at the U.S. Military Academy at West Point, New York. The purpose of the speech was to announce the dispatch of 30,000 additional troops to Afghanistan, where American armed forces had been fighting since 2001. In this sense, the address was an exercise in continuity: all of Obama’s predecessors over seven decades, beginning with the thirty-fifth president, Franklin D. Roosevelt, had had occasion to send American military personnel to distant lands.

Yet Obama’s remarks, properly understood, marked a sharp and momentous break with the pattern Roosevelt established and all of his successors followed. For even as he ordered the troops to Afghanistan Obama sought to place limits on the duration of their stay and the mission they would be carrying out, and he made it clear that the reason for these limits was that America could not afford to do more. The most important theme of his remarks was the acknowledgment of economic constraints on American foreign policy, a theme very seldom heard from an American president since Roosevelt took the United States into World War II.

Obama rejected “goals that are beyond what can be achieved at a reasonable cost.” He invoked “the connection between our national security and our economy.” He cited the need to “rebuild our strength here at home.” The only president he quoted was Dwight Eisenhower -- of all the chief executives since Franklin Roosevelt the one most committed to limiting the costs of American foreign policy -- and the words of Eisenhower’s that he cited, which referred to national security policy, were these: “Each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs.”

As if to emphasize Obama’s message of economic constraints on foreign policy, the congressional opponents of adding to American troop strength in Afghanistan proposed a special war tax to pay for it. The war was being funded by borrowed money, and its opponents understood that if the American public had to pay for it directly and immediately, out of their own pockets, they might well refuse to do so.

While the economic limits to which Obama referred will directly affect the foreign policy of the United States, their ultimate impact on the rest of the world is likely to be, if anything, even greater. As the president noted at West Point, “More than any other nation, the United States of America has underwritten global security for six decades.” Other countries have come to depend on a robust, ambitious, and extensive American foreign policy. The impending economic constraints will place in jeopardy the global tasks that the United States has performed since the 1940s; and what the United States has done has contributed greatly to global peace and prosperity.

When Barack Obama was elected in 2008 he and his supporters expected that his presidency would transform the United States. In one way, at least -- but not in a way that so many hoped -- that will be the case. Mounting domestic economic obligations will narrow the scope of American foreign policy in the second decade of the twenty-first century and beyond. Because the United States will have to spend so much more than it has in the past on obligations at home -- particularly caring for the ever increasing ranks of its older citizens -- it will be able to spend less than in the past on foreign policy. Because it will be able to spend less, it will be able to do less. Just what the United States will and will not do will be the most important issue in international relations in the years ahead. It is the subject of The Frugal Superpower.

The book’s first chapter describes the growing claims on the American budget. They stem not only from the cost of coping with the financial meltdown of 2008 and the subsequent recession but also, and above all, from the expenses of the country’s entitlement programs, Social Security and Medicare, which will rise rapidly to historic highs with the retirement of the baby boom generation of Americans born between 1946 and 1964.

Two aspects of the pressure to cut back on foreign policy expenditures that these rapidly mounting domestic costs will exert are particularly notable, and Chapter Two spells them out. First, while they may be normal for most countries most of the time, serious economic constraints on foreign policy did not affect the United States for almost seven decades before 2008. Second, such constraints will affect not only the United States but the entire world because the United States has played an historically unprecedented global role, functioning as the world’s de facto government. In an era of scarcity for American foreign policy, the world will get less governance.

Scarcity may, to be sure, bring with it some benefits. It will make the foreign policy of the United States less prone to serious errors. As discussed in Chapter Three, the enormous post–Cold War American margin of superiority in usable power over all other countries bred a certain carelessness that led to two major errors: the ill-advised eastward expansion of the Western military alliance in Europe, the North Atlantic Treaty Organization (NATO), and the disastrously incompetent occupation of Iraq. Less constructively, economic constraints will cause the United States to abandon some of the international services it furnished in the first two post–Cold War decades. It will no longer provide as large a market for other countries’ exports. It will almost certainly launch no further military interventions that require costly, protracted, and frustrated exercises in statebuilding, like the operations in Afghanistan and Iraq.

Abandoning these policies will still leave the United States with formidable international commitments, of which the most important will be ensuring security in Europe and East Asia, opposing the spread of nuclear weapons, and guaranteeing a secure geopolitical background for international commerce, including continuing global access to oil. Chapter Three also explains why it is that, while other countries benefit enormously from these policies, they will not give America much help in carrying them out.

The most serious consequence of a reduced American international role would be a major war. The two countries capable of provoking one are Russia and China. With the exception of the United States, their foreign policies will do more to shape international relations in the second decade of the twenty-first century and beyond than any other country. The uncertain prospects for Chinese and Russian foreign policy are the subject of the book’s fourth chapter.

Each of these countries derives more benefit from existing international political and especially economic arrangements than either is likely to achieve by attempting forcibly to alter them. Yet at the same time both have some capacity to disturb the international peace, and each has motives for doing so. Neither is entirely satisfied with the distribution of wealth, power, authority, or even territory globally and particularly in its home region. Whether, how, and to what extent Russia or China or both seek to take advantage of the new limits on American foreign policy is the most important question hanging over international relations in the second decade of the twenty-first century.

Even if China and Russia practice the self-restraint each has generally displayed in the first two decades of the post–Cold War period, one region will continue to require the active, costly engagement of the United States. That region is the Middle East, the subject of Chapter Five. It is both politically unstable and, because it harbors most of the world’s easily accessible oil, economically vital. Past American efforts to transform the region to make it more peaceful and so decrease the cost of American operations there have failed.

However, a different way to lower the costs of carrying out its responsibilities in the Middle East is available to the United States: a substantial reduction in the American consumption of oil through a major increase, via taxation, in the price Americans pay for gasoline. No single measure, in fact, would do as much to secure American interests worldwide in the face of the new economic limits on American foreign policy than a large reduction in American oil consumption. Mustering the political will to achieve this goal looms as the single most important foreign policy test the United States will face in the coming age of scarcity.

However the nation performs on that test, American foreign policy will change in a fundamental way. For almost seven decades following the outbreak of World War II, in deciding what policies to pursue beyond their own borders Americans almost never asked themselves the first question that every other country had to address: how much will this cost?

The United States was the billionaire among the world’s countries and, unlike the others, operated free of the need to distinguish carefully between necessities and luxuries. If building another missile or aircraft carrier or rescuing a particular country was deemed important, the United States could afford to do it. The international activities of ordinary countries are restrained by, among other things, the need to devote the bulk of their collective resources to domestic projects, such as roads, schools, pensions, and health care.

For decades, the United States was exceptional in remaining largely free of such restraints, and the foreign policies that this freedom made possible did a great deal to shape the world of the twenty-first century. That era is now ending. In the future the United States will behave more like an ordinary country. The pages that follow explore the consequences, for both the United States itself and the rest of the world, of the end of this kind of American exceptionalism.

From the book The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era, by Michael Mandelbaum. Excerpted by arrangement with PublicAffairs, a member of The Perseus Books Group. Copyright 2010.