7 of 7 people found the following review helpful:
4.0 out of 5 stars
America's decline is beyond entitlement overstretch, December 22, 2010
This review is from: The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era (Hardcover)
The Frugal Superpower argues that because of an "entitlement overstretch," America will not be able to conduct a foreign policy with unlimited funds, like in the past. Instead, the United States will have to become more selective in its overseas operations.
In this easy-to-read entertaining book of political economy, Mandelbaum skillfully sketches the most probable scenario, post-American superpower. Before doing so, he traces the modern history of the American power.
Mandelbaum argues that the Cold War forced America to construct a network with world reach to counter Soviet power. When the Soviet Union collapsed in 1990, the US did not scale back its power and rather maintained its expensive and powerful reach.
The author also argues that the globally unmatched American excess power might have lured America's presidents, Clinton and Bush, and made them commit foreign policy errors. He writes that after the Cold War, America fought more wars than it had during the Cold War. While the last of the wars in Afghanistan and Iraq showed America's unmatched military superiority, these two wars - coupled with incompetent post war planning and occupation - are still taking their toll on the nation's finances and world standing.
Mandelbaum writes about an inevitable American spending overstretch that will force Washington to make hard choices. To meet the expenses of the entitlements of its aging and retiring population, the United States will most probably cut expenditures in other areas, mainly overseas.
While America's inevitable economic hardships are a valid point, Mandelbaum's reasons might not be enough to explain them. True the "entitlement overstretch" will burden the US economy. However, even without these entitlements, America's economy has been suffering. Numbers in the summer of 2010 showed that the cost of every dollar the federal government borrowed was 46 cents. Servicing the debt is expected to further shoot up if Congress fails to find solutions to reverse the course of the country's finances.
Servicing the debt, a negative balance of trade, overreliance on imported energy and a shrinking manufacturing base, in addition to the "entitlement overstretch," have all been contributing to weakening America's economy. Mandelbaum erroneously leaves out the other economic spoilers and blames the retirement of the baby boomers alone for the expected economic ills and eventual superpower decline.
Mandelbaum rightly believes that the government has four options to collect money, and thus fund its domestic and foreign policies. These options are printing dollars, raising taxes, cutting expenditures and borrowing. Printing dollars causes inflation and might force nations that hold US debt (such as China with $2 trillion) to consider dumping an inflated dollar as the world currency. Raising taxes is politically unpopular in Washington.
Therefore, the US government is left with two choices, borrowing or cutting expenditures. Since the election of President Ronald Reagan in 1980, the government has been borrowing money to the extent that in 2010, national debt had reached $13 trillion. But Borrowing is unsustainable, and Washington will be forced to stop borrowing and start paying back debt, sooner or later.
With printing money, raising taxes and borrowing unavailable, Uncle Sam will be forced to cut expenditures. Such a step, according to the book, will cause fundamental changes in world affairs and America's role.
To further support his thesis that America will find herself unable to foot its world bill (protecting sea lines, international trade and energy sources), Mandelbaum writes that America's closest allies, especially those who benefit from Washington's role as a "world government," have never stepped up in the past to pick up the bill.
With American finances strained and allies unable to pay the difference, America's superpower will stand frugal.
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9 of 11 people found the following review helpful:
2.0 out of 5 stars
Simplistic, November 17, 2010
This review is from: The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era (Hardcover)
The economic and military power of the United States will diminish due to less consumption of market products and less available spending, primarily because of other demands, like Medicare, Social Security and other priorities. To the author, this is not a good result. He argues that the US properly acted as the world's policeman since the end of WWII, but that it can no longer afford to do so. He states, in general terms, that the US did so out of the best and most altruistic of motives, and generally ignores the covert activities of the CIA and US in Central and South America and elsewhere, as well as Vietnam and other major involvements that involved one consideration, the perceived interest of the US. There is no reference to the possibility that being unable to undertake the long wars of Vietnam, Iraq and Afghanistan will be beneficial to both the US and the world. There is no explanation of why Japan, South Korea, Germany, Spain and other countries can not maintain their own defense and protect their own interests. He suggests that the world will miss our dominance and provision of "governance to the rest of the world." The "blunder" of Iraq was the execution of our occupation, not the "preventative" invasion itself. He is critical of the growing intolerance for state building, such as in Afghanistan. His analogy to the Peltzman Effect is bizarre. He notes a lesser US may require more cooperation among allies, presumably missing the unilateralism W used for Iraq. His strongest point is that the US could stabilize the Middle East by non-military action, simply by raising its fuel tax to reduce consumption. This, he argues, would reduce the power of Iran and help stabilize the area. Imagine, the US can still lead and influence matters by diplomacy and other non-military actions. Certainly there is enough waste, fraud and duplication in our defense budget to effect substantial reductions without jeopardizing our security. Would 1,000 nuclear bombs be less secure than 5,000; or 2,000 fighter planes be less secure than 4,000? We have the first largest air force (the Air Force) and second largest (Navy) in the world. We spend more on defense (offense?) than the rest of the world combined. For better analysis and discussion read Bacevich's "The Limits of Power," and "Washington Rules," and Pfaff's "The Irony of Manifest Destiny."
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