The superpower remover
The numbers tell a sobering tale. Before the pandemic began, the United States was already on an unsustainable fiscal trajectory. Before the Great Recession, U.S. gross federal debt (including that which the government itself holds) stood at about two-thirds of GDP—67.7 percent. It jumped in 2009 to 82.3 percent and never came down; over the next ten years, it continued to creep upward to over 100 percent. As of the end of 2019, it stood at 106.9 percent. Before the crisis hit, Congressional Budget Office projections were dismal. The U.S. budget deficit exceeded $1 trillion, against about a $21 trillion gross domestic product…
It is hard to know what the total cost of the pandemic will be, but some preliminary estimates can be hazarded. The average ICU visit in the United States costs about $31,000, and some tens of millions of Americans (how many is unknown, but the projections from the Centers for Disease Control run to the hundreds of millions in worst-case scenarios) will be infected. Some of those—perhaps about ten percent, perhaps twice that—will end up in the hospital. A ballpark figure for the medical bills alone, therefore, is in the hundreds of billions. Whether these are paid by patients, the government, or healthcare providers and insurers agreeing to swallow the costs, they represent something like the absorption of 2 percent of GDP’s worth of brand new costs. There will also be a surge in spending—probably paid for in part with taxpayer funds—on basic medical supplies, including ventilators, which U.S. manufacturers are now promising to produce on a World War II scale.
Meanwhile, the productive capacities of the American economy will be hammered. Americans are going to ground for weeks or months. This is a giant hit to aggregate demand—the economy will shrink as nobody buys things—and there will be myriad knock-on effects, many of which are still hard to imagine. Some industries—anything to do with air travel, tourism, hospitality, food service, or live entertainment, not to mention education—are going to be devastated as people stay at home in compliance with social distancing directives. As many as 32 percent of the American workforce of 160 million are expected to lose their jobs. How long until they get them back is unknowable, but a year is a reasonable estimate; those projecting an “L-shaped” or “U-shaped” recession implicitly suggest it could take longer. The hit to the U.S. economy may be measured in trillions…
Facing this much economic damage, the United States also faces a threat to its power and security, and the world order on which its security depends. Even as it looks to its citizens’ welfare at home, the United States must be cognizant of the national security challenge that the pandemic and recession pose.
On this point, it is important to recall that American global hegemony rests on its unparalleled ability to project force abroad. That ability is sure to be tested going forward. The U.S. defense budget will have to end up on the chopping block—if not now, then in the coming years when deficits really start to soar…
The entire U.S. alliance network, by which the United States has historically led the world, depends on the perceived ability of the United States to respond militarily if an ally gets in trouble. A blow to U.S. credibility in this area can bring the entire system down. If a NATO ally is attacked and the United States does not respond, NATO ceases to be credible and probably falls apart (and takes the EU with it). Similarly, if any of the countries along the First Island Chain—Japan, South Korea, Taiwan, or the Philippines—are attacked, and the United States does not respond, those states will quickly make their peace with China. If credible doubts about the United States’ ability to do any of the above emerge, serious strategic realignments could well break out across the world…
In any case, the incentives are there for China, and perhaps even Russia, to test the boundaries of America’s already-wavering resolve and to undermine the credibility of U.S. security guarantees. We should expect more provocations if the United States visibly weakens…
Conspiracy theories about COVID-19 being a bioweapon have been debunked. But if you wanted to design a weapon to accelerate America’s decline as a global superpower, it would look like COVID-19. If we want to be the leader of the free world—if we want there to be a free world—we are going to have to be careful about how we manage the plague of our era.
