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Sunday, September 11, 2011

What's Ahead for US Foreign Policy

Immediately following the horrific events on September 11th, the US acted on impulse and embarked on what now marks a decade of war on terror. The pre-9/11 mentality was full of optimism (despite the burst of the internet bubble) mainly in part of government's meddling in the housing and credit markets. The silently orchestrated debt crisis was inevitable despite the talk of pundits correlating the war with current economic slowdown. The terror attacks made conditions worse as it gave government more reason to prevent immediate recession. The decision to destroy the enemy was clear, but the motivation was filled with too much emotion and not enough reason.

Even as a child coming home from school to see the aftermath of the World Trade Center collapse on television, and knowing that my mother worked a few miles north still within the vicinity of lower Manhattan was too much to bear. The drive that I took with my Dad from the Bronx to a bridge way to wait for Mom was the worst ride of my life. The radio was filled with words of war, and I was convinced that everything I appreciated about my city was under attack by evil. I wanted to get even. That mindset of an 11 year old boy  was shared by many on that day, but forgotten at the time of battle. The purpose of war is to protect the crucial assets that make up a strong nation (land, people, resources, etc). Emotion propels action, but the basis of the fight should never be forgotten at home. 

As the war on terror progressed, we forgot to maintain what we were fighting to protect. The World Trade Center towering over the financial capitol of the world, was a beacon of capitalism, only to be destroyed. Since then, the motive of war has gone off point and the US is slowly having less to show for our world might. The logic discussed here makes further sense as troops fighting overseas would want to return home to a stronger economy, seeing first hand the result of hard work. Instead, often times the dream turned reality is subsidized with failed promises. Veterans are faced with an unsustainable pool of funds for rehabilitation services and other structural issues. 

Congress allocated $1.3 trillion (adjusted for inflation) towards the war on terror. The Afghanistan invasion costed us about $450 billion, and the Iraq invasion $800 billion. The cost of the externalities of war stand at an estimated $900 billion which is mainly veteran services (not including the ripple effect of other related spending).

According to Washington Post's Top Secret America Investigation, the defense industry expanded to about 2,000 private contractors mainly for IT & Support and military personnel. The alarming observation here is that security and defense contractors have moved away from production to services, responsible for the overwhelming bureaucracy of 1,300 facilities and 850,000 security clearance officials. Many of these agencies have sub-agencies, with a web of other agencies under the same umbrella often performing the same task. With a defense industry of massive scale, the US government created yet another critical asset in need of protection at all costs. 

The bottom line is that our assets are under attack and must be strengthened while protected. The threats are not just physical. China should be of main concern given the astronomical amount of attempts by Chinese hackers to tap into US government intelligence and private industry to mimic or destroy us in our tracks. The Middle East is an obvious threat, yet we still depend on the region for a large share of energy supplies instead of ramping up our own production at home and fighting to protect our resources like Russia is doing. With a defense budget of $650 billion between now and 2020 (small scale compared to the US), Russia is investing heavily in defense while it makes record discoveries of natural resources and maintains its regional power through distribution of natural gas deemed critical by smaller neighbors and the not so mighty Euro-zone. 

So much potential to get it right. Let's not wait any longer.

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