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The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era

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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.

Once I started reading The Frugal Superpower, I couldn't put it down. Written simply and elegantly, Michael Mandelbaum takes on the crucial question-what will America's role in the world be in an era of diminishing resources? It portends to be a more dangerous world and all of our "friends" may be less than happy when they don't have America to complain about. They may even have to pay for their own defense! The author has some interesting solutions. Anyone interested in the future of the world as we know it should definitely read this book.

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."

This is an outstanding work of the first order that is both vitally insightful and very timely. Michael Mandelbaum's unique abilities include tying together multiple relevant factors and providing the reader with a wonderfully clear explanation of how our situation developed and, more importantly, what it means for all of us now and in the future.

The unpredictable volatility that permeates the world economy and the related geopolitical situation are less frightening once you have followed Michael Mandelbaum through his history of our current predicament and our choices going forward.

This fascinating book is a both a joy to read and to contemplate. The author has range and depth that permeates the variety of levels evident in this fine work. While certain observations might strike some as self-evident, they are analogous to the Newton's observations on gravity which where clear only once a great mind had provided the basis for understanding. By providing us with that understanding, Professor Mandelbaum gives the reader the basis to study and consider critical questions for our time.

The intellectual rigor that Dr. Mandelbaum displays in his timely and insightful work is without parallel. Surprisingly for a work of such force, it should be highly readable and easily approachable for a range of individuals. Having read the book, I am now acquiring the audio version so I can hear Dr. Mandelbaum's cogent analysis again.

Reviewed by David M. Kinchen


To foreign policy expert Michael Mandelbaum, Sept. 15, 2008 may turn out to be as significant a date
in American history as Sept.11, 2001.

He reminds us in his new book, "The Frugal Superpower: America's Global Leadership in a Cash-Strapped Era" (PublicAffairs, 224 pages, index, $23.95) that on Sept. 15, 2008 Lehman Brothers "collapsed, creating a panic in the nation's financial system and an immense loss of wealth, and deepening an already serious global economic downturn."

The date also will be significant in American foreign policy, he predicts, because the events of that mid-September day two years ago "accelerated a series of developments that will change the resources at the disposal of policy-makers in Washington, limiting the financial means available to conduct American foreign policy."


Mandelbaum posits that the economic crisis of 2008 -- and especially the gargantuan economic obligations that will confront the country in its wake -- will redraw the boundaries of American foreign policy in two closely related ways.


First, the limits of the possible for foreign policy will be narrower than they have been for many decades. The government will still have an allowance to spend on foreign affairs, but because competing costs will rise, it will be smaller than in the past.


Second, the limits that constrain the government in its external initiatives will be drawn less on the basis of what the world requires and more by considering what the United States can--and cannot--afford on its borrowed dollars. It makes sense to Mandelbaum -- and the average man or woman in America -- that in an era in which fewer resources will be available for everything, it is certain that fewer will be available for foreign policy.


When working Americans are paying more than in the past to support their fellow citizens who have retired, and retirees are receiving fewer benefits from the government than they were promised, neither group will be eager to offer generous support to overseas ventures.



For almost seven decades beginning with World War II, and in contrast to the experience of almost every country throughout history, freedom of maneuver rather than constraints on action was the norm for U.S. foreign policy. In foreign affairs as in economic policy, the watchword was "more." That era has ended. The defining fact of foreign policy in the second decade of the twenty-first century and beyond will be "less."


The country's soaring deficits, fueled by the huge costs of the financial crash and of its entitlement programs--Social Security and Medicare--will compel a more modest American international presence.

In assessing the consequences of this new, less expensive foreign policy, Mandelbaum describes the policies the United States will have to discontinue, assesses the potential threats from China, Russia, and Iran, and recommends a new policy, centered on a reduction in the nation's dependence on foreign oil, which can do for America and the world in the 21st Century what the containment of the Soviet Union did in the 20th Century.

Speaking of containment of the Soviet Union, Mandelbaum believes that President Bill Clinton's administration is reponsible for one of the two major foreign policy errors of the late 20th and early 21st centuries: the expansion of the North Atlantic Treaty Organization (NATO) in the former satellites -- and even former republics such as Latvia, Lithuania and Estonia -- of the former Soviet Union.

He writes: "NATO expansion soured relations with Russia because expansion broke the promise that Soviet leaders believed, with good reason, they had received from their Western counterparts, as the Cold War wound down, that NATO its reach into what had been communist Europe. The result was to create festering doubts in the minds of Russians about the trustworthiness of the West, and especially the United States."

The other major error was the George W. Bush administration's March 2003 invasion of Iraq, Mandelbaum writes: "The debacle in Iraq resembled, in important ways, the misstep of NATO expansion. The resemblence strongly suggests that the root of both was a feature of post-Cold War foreign policy that transcends partisan differences."

Mandelbaum says "what the two fiascoes had in common was expressed in F. Scott Fitzgerald's 1925 novel The Great Gatsby, by the book's narrator, Nick Carraway, in describing the wealthy socialites Tom and Daisy Buchanan. 'They were careless people....They smashed up things and creatures and then retreated back into their money or their vast carelessness.'"

We obviously can't afford "carelessness" in our foreign policy, given the horrendous budget deficits and the entitlement programs -- Social Security and Medicare -- that will be accessed by the gigantic baby boom generation of 1946-64, Mandelbaum writes in his clear, easy-to-comprehend prose.

I recommend "The Frugal Superpower" without reservation and I hope that President Barack Obama and his Cabinet and advisors and Congress will follow the sensible policies advocated by its author.


About the Author
Michael Mandelbaum is the Christian A. Herter Professor of American Foreign Policy; Director of the American Foreign Policy Program at Johns Hopkins, SAIS. He is a former faculty member at Harvard University, Columbia University and the U.S. Naval Academy; his Ph.D. in political science came from Harvard University.

Publisher's website: [...]

Few books are as arresting in their analysis and as beautifully written as THE FRUGAL SUPERPOWER.
For anyone and everyone interested in America's role in the world, and in the domestic situation in
the United States, this is the book. Professor Michael Mandelbaum, whose track record for far-seeing
thinking is unparalleled, is simply the best author writing books today on the world and on the role of the United States in the world. Highest possible recommendation.

THE FRUGAL SUPERPOWER is essential reading for 21st Century geopolioticians. With each passing month, America's fiscal situation becomes more perilous. How can we hope to preserve an essential foreign policy leadership role for the nation under such circumstances? Mike Mandelbaum provides an indispensable roadmap to the treacherous geopolitical terrain that lies ahead.

Michael Mandelbaum has really done it this time! He has taken complex and puzzling ideas and set forth a mere 194-page essay that makes these things simple to understand and remember.

For years many analysts and pundits have been predicting a near future of less affluence for the American people. Other analysts have gone in the other direction, predicting that technological improvements will make our children's futures better than our own. Mandelbaum gives a logical explanation for why there will be less per capita consumption in the U.S.

The Frugal Superpower uses logic to demonstrate why we can expect much less surplus in our economy as our babyboomers stop producing and start to draw entitlements beginning in 2011. The enormous debt of our government combined with the soon-to-be popular priority of providing for older, retired workers means there will be far fewer resources available for foreign policy programs.

With greatly diminished resources available to execute foreign policy, we can expect to end up consuming a smaller ratio of the world's goods. But that's not really the cornerstone of Mandelbaum's approach. He says our government will tax the remaining workers more, and we know from many economic studies that means less private consumption.

Next, Mandelbaum discusses something that I think most foreign policy experts avoid when they communicate with the public. He points out the difficulty in guaranteeing the movement of oil from the Middle East to world markets once the U.S. scales back its foreign policy commitments. He suggests we ween ourselves off our current rate of oil consumption by taxing gasoline. In fairness, from the introduction he states that the American society is now beginning to undergo a period of change comparable to that of the Great Depression and WWII.

If we hope to distribute our foreign policy burden to other countries in the developed world, The Frugal Superpower tells us otherwise. Other developed countries have even worse demographic trends and their priorities will be localized. We're not going to get help, if Mandelbaum is correct. That's sobering.

I feel this is a great book. It has stayed with me in my thoughts everyday. My expectations for the future have changed, and I feel confirmed in my beliefs that we are headed to a frugal lifestyle and what was once normal will soon fade. I think reading this book is like taking the red pill from the movie, The Matrix.

I had already read the book when it first came out, and greatly enjoyed it. I wanted to give it to my son who was about to take a 14-hour flight. I gave him this format of the book, and he just emailed to me as follows, "Dad, The Frugal Superpower was awesome. I can see why you wanted me to read it. As an English major, I am, as you know, not conversant at all in public policy and the major currents affecting international relations. This was the ideal introduction for me, and I really appreciate your giving it to me. I learned so much, and it was a pleasure to hear. I ended up listening to it twice on the flight." I hope that other parents and friends will give this book to their kids and the people they love, be it on Kindle, MP3 or in book form. It is the best guide to the next 20-30 years that anyone could read, or listen to. Highest recommendation.

Let's be clear. This is not an academic work backed by research. There are no footnotes. No tables. No graphs of any kind. Numbers seem to be quoted out of thin air. The arguments are simplistic and the book may be great for the average lay-person. But for students of research and advanced readers of foreign policy, this is way too simplistic. Most of the 'insightful arguments' that other reviewers have found are nothing new. They've been repeated in scholastic journals and foreign affairs magazines for years. What the author has done is only to take bits and pieces of dated information and republish them in his name.

What's more. Some of the things mentioned in the book are outright wrong. For example, the author (jumping onto the hate-China bandwagon) cavalierly claims that China has expanded its army size. That's incorrect according to CIA reports and other sources. There are other inconsistencies and half-truths in there-- a symptom, no doubt, of a work that does not need footnotes and biblios.