‘Yours remains what it has always been, a nation which is exceptional in every way’, Gillard told her audience. This would have pleased Sarah Palin, who holds American exceptionalism as an article of faith, more than President Obama, who has been more nuanced.
His 2009 comment — ‘I believe in American exceptionalism, just as I suspect that the Brits believe in British exceptionalism and the Greeks believe in Greek exceptionalism’ — remains a lightning rod for right-wing critics of the administration who accuse him of being insufficiently patriotic.
Now, however, the President’s reference to Britain and Greece looks increasingly apposite for another reason — America has joined these two struggling European economies in terms of its exceptional levels of government indebtedness.
With a debt-to-GDP ratio approaching 100 per cent, with much higher projected ratios in coming decades, America is in the midst of an economic predicament that is without parallel since World War Two.
It is this issue, more than any other, which has the potential to change radically Australia’s relations with the United States in coming years.
The US, once our leading trade partner, is now of declining importance both as a source and a destination for Australian trade. At the same time, America’s debt today stands at $14 trillion dollars — with an annual interest bill alone of almost $1 trillion, the size of Australia’s entire economy.
Forty cents of every dollar spent by Washington today is borrowed — most of it from just two countries, China and Japan.
These are of course the same two Asian superpowers that have pushed America to third place in trade with Australia.
On the back of this startling economic shift is a looming reduction in military spending.
For the first time in many decades, the prospect of serious cuts to America’s extraordinary level of defence spending — currently greater than that of the next 17 largest countries combined — is being actively discussed in Congress.
This may be good news for the American taxpayer facing cuts to their ‘entitlements’ — pensions, superannuation, and social welfare — if the US is to regain fiscal solvency. But it is unlikely to be good news for Australia.
The reason is not hard to discern. As my colleague Michael Mandelbaum has written, America is going to have to become ‘the frugal superpower.’ And with this new frugality will come some very difficult strategic choices, both for the US and for Australia.
Primary among these is whether the US is able or willing to keep investing in the kind of overwhelming military superiority that has been the backbone of its global power.
This includes a massive blue water navy, unparalleled air and space dominance and a network of overseas bases that span the world, not least in the Asia-Pacific region where Okinawa, Korea and Guam play the classic role of unsinkable aircraft carriers.
Australia has been a beneficiary of this lavish force structure, and of the privileged access to the US military establishment that comes with it, not least because we would have to spend vastly more on our own defence without it.
In return we have been the most loyal of US allies (even more so than Britain, as I never tire of reminding my American students) — no country has contributed as faithfully to US overseas entanglements, a point underlined by Gillard’s gift to the Vietnam memorial.
But today, for the first time, there are serious questions being raised about how long such munificence can last in a future of restrained government spending and exploding debt.
It is fitting, therefore, that Prime Minister Gillard’s address to a joint sitting of Congress on Wednesday has as its theme the 60th anniversary of the ANZUS alliance, an alliance built on a combination of American extravagance and Australian loyalty.
Whether this quintessential 20th century arrangement will continue to work in a more impecunious 21st century context will be the big question left hanging in the Capitol dome.
Benjamin Reilly is Professor of Political Science in the Crawford School at ANU, and currently a Visiting Professor at the Paul H. Nitze School of Advanced International Studies in Washington DC. An earlier version of this piece was originally published in The Canberra Times, under the title “PM faces ‘frugal’ superpower headache“.
After ANU, SAIS, the next sensible destination for Australia’s strategic alliance, definitely, is Beijing. I hope that Prof. Reilly is fluent in Mandarin like Honorable Rudd.
The US has been the world superpower politically, militarily and economically. Its military superiority has been supported by its world number one economy status.
Once its economic power wanes, its military power is likely to decline with it, especially as its budget deficit and government debt becomes unsustainable.
The sooner people realise this and take realistic strategies suitable for these changed circumstances, the better the world will be.
The 21st century international stability depends upon the preponderance of China-US together, not alone.
I think the picture of Admiral Mike Mullen, the Chairman of the Joint Chiefs of Staff, the higest-ranking officer in the U.S.Armed Forces and the President’s principal military advisor, sit together with Australian PM means the U.S. extended deterrence over Australia.