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Foreign Policy

Conflict With North Korea Is An Economic Problem

North Korean Dictator Kim Jong-un

North Korean Dictator Kim Jong-un

North Korean leader Kim Jong-un is saber-rattling in much the same way his predecessor father did each time he wanted further concessions from the West.  The young, brash leader is threatening to begin developing the country’s nuclear capacity again and to use it against the United States.  There are a number of reasons to be concerned about this situation.  For starters, the simple fact that no one knows how stable or rational the North Korean dictator is makes him potentially much more dangerous to the world.  His recent bravado filled pronouncements may have backed him into a corner that would make one misstep, intentional or not, a start to an unwanted war.

The Obama Administration’s constant pronouncements that the debt is not an immediate crisis aside, our current fiscal problems could come back to haunt us in a big way as it relates to any potential conflict with North Korea – and I am not talking about our inability to fund a war effort.

While our national debt and related poor financial condition would logically seem to cause fear because it might impact any ability of the federal government to fund large scale and/or long term military operations, there is a much bigger problem looming for those willing to see it.  It’s called China.

Remember, the United States has been strongly encouraging China to engage on the North Korean problem since the prior administration of George W. Bush.  The Chinese have largely been uncooperative.  History tells us that from at least the time of the Korean war forward that the Chinese consider North Korea an ally and will support them in times of conflict.  Why wouldn’t they since the two nations share the same political structure and single party of communism?  The Chinese will also not want increased American presence and influence in a part of the world they consider their own sphere of geopolitical influence.

U.S. Warships Ready For Duty

U.S. Warships Ready For Duty

So, what happens when that same Chinese government decides to side with North Korea and subsequently calls all the loans we have taken out from them in the last decade?  Looking at it from another angle, how will Americans take it if and when we begin paying back those loans and the very money we use to pay them is dumped into a war effort opposing US interests.  It sets up a metaphorical “no win” situation. 

Americans should stop to consider and, after doing so, be concerned that a country as economically strong as China may be on the opposite side of a conflict with North Korea.  What’s more, the Chinese military is not an insignificant foe.  As a result, a full fledged war with North Korea could be disastrous for the United States economically, politically, and militarily.  We have the best military in the world, bar none.  But they cannot fight and win a war that is starved of the financial and industrial support needed to wage such a prolonged effort.

This very large potential problem is a big reason why the national debt and the deficit are so important to solve.  It’s about more than morals and economics.  It’s about national security and our very survival.  Owing people money, especially big sums, is like owing the bookie up the street for a lost bet and not having the cash to pay up.

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About Josh Quinter

I am a politcally active private practice attorney in Suburban Philadelphia.

Discussion

4 thoughts on “Conflict With North Korea Is An Economic Problem

  1. I enjoyed reading your well-thought out perspective on how our fiscal state and deficit are directly linked to our efforts to deal with North Korea effectively and confidently. What do you feel is the first step to take to build our economy so as to not only “feel” strong but to “look” and “be” strong as well? There are many roads to take. If you were in charge, what would YOU do? Thank you again for your insightful article.

    Posted by Sabrina | April 4, 2013, 7:31 pm
    • Thanks for your kind words. While it’s hard to answer your question at length in a short comment, here are a few conceptual ideas that I think would help. First, feeling and looking strong will take care of itself by being strong. To be strong, we have to recognize that any economy is a dynamic thing. It’s an over used, but true, cliche. The free market will work. It unleashes human potential and encourages people to better their situation by good ideas and hard work. How do we accomplish this? Start by lowering and flattening taxes. Everyone should pay something and taxes should be low. This encourages buy-in from everyone and does not penalize anyone. We should then shrink the size of government. This does two things: (1) a smaller government cannot get in the way of the private sector as much as it does now; and (2) in theory, a smaller federal government should spend less and therefore reduce our deficit and allow us to begin paying down debt. A good example is Obama-care. Aside from being way too much regulation, it is a leviathan that will cause the federal deficit to balloon even more. One need look no further than histroy to see these theories play out. State countrolled countries that contradict the free market, which in the last 50-75 years have traditionally been socialist or commnunist countries, have been weaker economically and in every other way. Those that embrace the free market have prospered. What’s more, even recent history shows the curve we are on if we are willing to see it. Europe adopted a welfare state some time ago driven by the same ideas now being pursued here and they are much worse off than us. Greece and Cyprus are evidence of what is in our future if we don’t make some changes.

      Posted by Josh Quinter | April 5, 2013, 9:42 am
  2. Lowering taxes and cutting government are awesome ideas, but that won’t prevent national bankruptcy. The total debt obligations of the US, including the aggregate annual budget shortfalls (which will hit $20 trillion in a few years), and the Medicare, Social Security and Obamacare fund deficits total up about $200 trillion and will hit acutely by the 2020s if not before that. The only two realistic options seem to be raising all tax rates to about 90% or a repudiation of the debt. Tinkering with the retirement age, or slowing the growth of government isn’t going to do the trick. On the bright side, Brazil didn’t go all Mad Max after their numerous debt crises in the 80s and 90s so hopefully we the hurt will be short-livrs) and result in the cathartic abandonment of the nanny-state and Federal Reserve anti-market manipulation of the economy.

    Posted by sweatyfederalist | April 5, 2013, 10:38 am
  3. Agree on some points; and on others I am not sure I can. First, I agree that te deficit and corresponding debt (which are different things) are humongous problems and that slowing the growth of government alone is not enough. I would not tinker with the retirement age or slow the growth of government. I would, rather, cut government and make it smaller. Tinkering with anything won’t solve the problem anymore. Bold moves are required.

    There is a larger point too though: there is debt and then there is out of control debt. For many years the U.S. had a managed debt. Obviously no debt would be better, but I am not sure how realistic a goal it is to eliminate it all together. I agree that severe cuts to the “nanny state” are in order, but I support that for a whole bunch of reasons in addition to economics. On the other side of the ledger, I am not sure the math you are using is accurate because there is no real way to tell what the real numbers are at this point. So many people have so many different positions on them. Second, I disagree that repudiation of the debt is an option. So many other problems come along with that, I think we have to find a way to pay people what we owe or negotiate our way out of the mess.

    It will take moral courage and strong leadership, but I am still an optimistic person when it comes to America. If we get our mindset right, we can achieve anything. As Reagan said, “And after all, why shouldn’t we believe that. We are Americans.”

    Posted by Josh Quinter | April 7, 2013, 10:22 am

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