The OTHER looming crisis

Salon has a sobering piece on oil, China, the US and the potentially disastrous addition of W into the mix. A must-read.

Which brings us, as usual, back to President Bush, who's providing us with an object lesson in strategery: How not to situate the U.S. vis-à-vis China, both militarily and economically. In the big picture, international terrorism and the potential for China to grow militant towards the U.S. represent the two gravest threats to American national security in the 21st century. It would make sense then not to tie ourselves down in unnecessary wars. Had we acted with precision in response to Sept. 11th, we would have invaded Afghanistan and then stayed there in full force to finish the job, eliminating Osama bin Laden and al-Qaida's mountain redoubts. Instead, Afghanistan is still dicey and our military is overextended in Iraq, precluding major combat operations elsewhere.

Economically, the Bush administration's "don't tax but also spend" policy of supply-side tax cuts has caused America's budget surpluses to veer sharply into the red, generating legitimate concern of a third-world style financial meltdown. China is loaning us money by buying our bonds. If China wants to trigger a financial crisis here in the U.S., all it has to do is demand that we pay our debts and pull its money out of the American market. One factor preventing China from doing that is the amount of money American consumers spend on Chinese goods, which those consumers wouldn't be able to do in the midst of a depression. Still, America is in an untenable financial position. The U.S. can't afford to go deeper into debt while floating a costly war in Iraq and figuring out how to pay for Social Security and rising health-care costs.