Wednesday, June 06, 2007

A Calamity Waiting to Happen? The Costs of a Precipitous U.S. Withdrawal from Iraq

Over at Central Sanity, Michael Van Der Galien put up an interesting post on the potential ramifications of a precipitous U.S. withdrawal from Iraq. The post is largely citing Jason Steck's post, "Costs of Leaving Iraq," from the popular centrist blog, The Moderate Voice. Here's a segment from Steck's entry:

The costs of staying in Iraq are well known. The changed deployment strategy that coincides with “the surge” brings U.S. troops into closer contact with the Iraqi people, at the cost of higher casualties. Exacerbating this effect are advances in insurgent technology and tactics, stronger bombs with smarter positioning. Casualty rates that used to be 1-3 per day are now in double digits per day and the rate may continue to accelerate.

The material cost is also crushing, with the United States straining under record budget deficits driven as much by military spending that approaches the surreal figure of a trillion dollars per year. Much of this is being put on the country’s credit card, creating
conditions for a potential global economic meltdown.

The costs of leaving should not be ignored, however. Whatever the level of sectarian conflict that exists now, it would be dwarfed by the cataclysm of violence that would accompany an American withdrawal. The presence of U.S. forces is obviously insufficient to prevent sectarian violence, but that presence does function as a brake — groups that seek U.S. support, training, and equipment dare not indulge in the most blatant kinds of atrocities. If that brake was released, low-level terms like “sectarian violence” could not describe the result. “Genocide” might make a return to Middle East headlines.

Of course, it is possible to shrug with resignation at these scenarios. Many are convinced that the presence of U.S. troops causes as much violence as it prevents, maybe more. Others believe that preventing genocide in Iraq is not worth the continuing cost in American lives and treasure. But these views overlook the costs to the United States of withdrawal from Iraq.

Even leaving aside abstractions like the perception of U.S. weakness and faithlessness towards allies, Iraq’s accelerated descent into a failed state would open up a window where the scenario of Iraq being an international base for al-Qaeda that was fiction in 2003 could become a monstrous reality. The capture of an oil-rich state by al-Qaeda would be intolerable to the United States, forcing a return to Iraq under conditions even tougher than found there now.

Further, if Iraq’s government were to collapse after a U.S. withdrawal, the resulting vacuum would not stay contained within Iraq’s borders. The threat to government stability in Saudi Arabia and the Gulf States could be extreme. The resulting threat of economic devastation to the United States would force a renewed intervention, at even higher cost.
I'd like to comment on two points here, first on Steck, and then on Van Der Galien:

Regarding Steck on the "conditions for a global economic meltdown," I think that's loaded language inferring intense international and (especially) U.S. economic vulnerability arising out various global relationships of complex interdependence with China. The main issue for Steck, it seems, are two: (1) What's the global impact of China's economy faltering into dramatic recession? And (2) what would be the effect on the U.S. current account balance should China unload much or all of its billions in U.S. treasury securities (in other words, could China cause a balance of payments crisis in the U.S., leading perhaps a potential recession or deeper American economic collapse)?

I would argue that Steck is mainly conjecturing, and he has put up little evidence for his claims nor has he linked to more sources of evidence besides a single USA Today article (from an earlier Steck post).
The USA Today piece asks, dramatically: "Is America at China's Mercy?" The article then proceeds to answer the question with brief interview questions from economists and financial experts. One noteworthy response if from Peter Morici, at Princeton, who answers:

Not much. If Chinese growth simply slowed because of internal policy changes, the effect on the global economy would be minimal. For example, if China significantly revalued its currency or simply found a way to keep its exports from growing so fast, industrial activity would pick up in other Asian and Latin American economies. China is very different in its effects on the global economy than the United States. China is a huge export machine, powered by massive subsidies and an undervalued currency whose effects equal much more than 10 percent of its gross domestic product. China has a large trade surplus that deprives other developing countries of export markets. Slow the Chinese export machine and other economies would grow faster. Close to home, Mexico would profit, for example.
Check some of the other responses from the USA Today article as well. There are further perspectives arguing against the dramatic impact of a Chinese slowdown on the international and U.S. economies. I'm not an expert in international monetary policy, of course, but we saw similar arguments over threats to America's financial position during earlier eras of monetary and trade conflict, for example, with Japan in the 1980s. Today, the U.S. remains the chief destination for global financial investment, irrespective of short-term blips in currency valuations in Europe or elsewhere.

I also would like to see Steck's sources for his per annum spending estimates of a trillion dollars for Iraq. The entire federal budget for fiscal year 2007 is approximately $2.9 trillion. The defense budget itself is about 20 percent of federal spending -- a bit over $400 billion for 2007. Even with supplemental, off the shelf Iraq appropriations in the range of $100 to $200 billion, total defense spending -- including finances for the Iraq war -- would be well below the trillion dollar mark.

I do think Steck is right on about the consequences of an American pullout, so I have no quibbles with his argument there (and I'm glad he articulates these points).

Now, as for the original Central Sanity post with which I started (and to which I've linked above), Van Der Galien notes that "nobody is talking about" the potential calamity likely to befall the Iraqi people should the U.S. withdraw precipitously. However, his point is only partly true. I would agree that the U.S. media have mostly focused on the politics of the war of late, especially the partisan battles in Washington over war funding (not to mention the steady barrage of news of bombings coming out of Baghdad and other hot spots in the theater). Yet, there have been periodic articles focusing on the dramatic dangers of an early U.S. withdrawal. One of the best of these is Reuel Marc Gerecht's Weekly Standard piece from last October, "
Running from Iraq."

Also, John McCain has been one of the most prominent official voices warning against the dangers of an early withdrawal. See my recent post, for example, "John McCain Remains Firm on U.S. Support for Iraq
," where the senator and presidential aspirant -- in a Meet the Press interview -- discusses the Iraq conflict at length. Also, Senator Joseph Lieberman periodically writes commentary pieces on the American commitment to Iraq in the major newspapers (see here, for example). Like McCain, Lieberman speaks eloquently of the cause for which we fight, the stakes our conflict entails, and the dangers of folding up our responsibility to the security of the Iraqi people (see his Wall Street Journal interview on the Iraq deployment as well).

I could mention a few more commentators who write on the potential for a sectarian bloodbath upon an early U.S. exit, but that's enough for now. Van Der Galien wrote a good post about an important topic, one that's more urgent certainly than current policy deliberations would seem to indicate.

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