“The number one threat facing America is its debt burden”

Granted extraordinary access to Pentagon officials, Edward Luce discovered that even they admit the

Decline and fall: the remains of the Packard Motor Car Company, which ceased production in the late 1950s, in Detriot, Michigan. Photograph: Charles Ommanney/Getty Images.

Beyond the naval shipyard in south-east Washington lies Fort McNair, America’s third-oldest continuous fort, which looks across the Potomac at the Ronald Reagan national airport. Sacked by the British in the war of 1812, the fort is today better known as the home of the National Defense University (NDU) – the descendant of the Army Industrial College that was set up in 1924 to prevent a recurrence of the procurement difficulties that had blighted the US military during the First World War. It was also supposed to act as a kind of internal think tank for the military.

NDU was the place where promising officers were sent to prepare their minds for leadership. Dwight Eisenhower, after whom its main redbrick building is named, graduated from here. By focusing on the resources needed to sustain the US military, these mid-career officers think differently to others: they grasp the importance of a robust economy. “Without it, we are nothing,” says Alpha, a thoughtful air force colonel, who, as is the custom, is known by his military nickname (a name I have changed to protect his identity). “People forget that America’s military strength is because of our power. It didn’t cause it.”

I got to know Alpha in peculiar circumstances. Unusually for a foreigner, particularly one whose forebears once trashed the place, I was invited by the NDU to judge the school’s annual exercise in national strategising. Along with two other “distinguished visitors” – a label that has never before, and is unlikely again, to be bestowed on me – I was invited to assess a ten-year national security plan for the US that the students had spent the previous two weeks thrashing out. The campus also conducts hi-tech war simulations in which outsiders with military or diplomatic expertise are invited to participate.

This was an exercise in much fuzzier geopolitics. In short, what should America do over the next decade to sustain its global pre-­eminence? I was intrigued to hear what these soldiers thought. Would they focus on defeating al-Qaeda, pacifying Afghanistan and disarming Iran? Or would they concentrate more on containing China as the emerging challenger to American power? As the saying goes, give a man a hammer and all he sees are nails. These people (I reminded myself) are the product of by far the most powerful military machine the world has ever known. Which nails were they seeing?

In what will qualify as another first and last, when I entered the room all its occupants stood and then, even more excruciatingly, sought my permission to sit down again. I momentarily thought about making a run for it. Instead we made our introductions. Of the 16 members of the group, nine were in uniform and the remainder were mostly senior civilian officials from the Pentagon, the department of homeland security and the state department. To judge from their accents, at least half of them were from the south. Most had done combat duty in Iraq and Afghanistan. “I think you could still describe the US military as a bastion of Republicanism,” Alpha told me a few days later. “But it’s a different kind to what’s in ­fashion nowadays.”

Over the following three hours, this heavily be-medalled group laid out its blueprint. For the most part it was a highly articulate pre­sentation. The only small exception was a ­tendency to stray into military jargon. Terms such as “off-ramp”, “kinetic” and “situational awareness” kept recurring. It reminded me of an American colleague at the Financial Times who, on his return from a briefing at the ­Pentagon was asked what he had picked up.
“I learned that situational awareness is a force multiplier,” he said. “Which means if you know where you are, you don’t need so many people.” When I related this to Alpha he smiled. “We could have done with some more situational awareness when we went into Iraq,” he said.

The group’s premise was that the US still had enough power to help shape the kind of world it wanted to see. By 2021 that moment would have passed. The country needed to act very fast and very pragmatically. “The window on America’s hegemony is closing,” said the ­officer selected to provide the briefing. “We are at a point right now where we still have choices. A decade from now, we won’t.” The US, he continued, was way too dependent on its military. The country should sharply reduce its “global footprint” by winding up all wars, notably in Afghanistan, and by closing peacetime military bases in Germany, South Korea, the UK and elsewhere.

It should not to go to war with Iran. “We have to be able to learn to live with a ­nuclear-armed Iran,” the briefer said. “The alternative [war] would impose far too high a cost on America.” In Asia, the US should recognise the inevitable and offer the green light to China’s military domination of the Taiwan Straits. In exchange for the US agreeing to stand down over Taiwan, China would push North Korea to unite with South Korea. Finally, the US should stop spending so much time and resources on the war against al-Qaeda (the exercise took place about three weeks before Osama Bin Laden was killed).

All this was a means to an end, which was to restore the US’s economic vitality. It would not be easy. It may not even be possible, they conceded. But it should be the priority. “The number one threat facing America is its rising debt burden,” said the briefing officer. “Our number one goal should be to restore American prosperity.” Intrigued by the boldness of their vision, I was unprepared for what followed. The briefer said they had all agreed on the need to shrink the Pentagon budget by at least a fifth, partly by closing overseas bases, partly by reducing the number of those in uniform by 100,000, but also by cutting the number of “battle groups” – aircraft carriers – below its current level of 11.

Most of the savings would be spent on civilian priorities such as infrastructure, education and foreign aid. None of this would be possible were the US at war, or even under threat of war, they said. It could be pulled off only if the country were, in effect, to cede – or “share” – its domination over large parts of the world. “We would need to persuade our friends on the Republican side that America has to share power if we want to free up resources to invest at home,” the briefer said. “We tried really hard to come up with alternatives. But we couldn’t find a better way to do this.”

Led by my two “co-judges”, we probed the 15 men and one woman for signs of hesitation. Expecting some kind of a reaction, I suggested that their plan would be seen as dangerous. Pull out of Europe? Accept nuclear parity with China? Embark on a Marshall-style plan to revive the US economy? The chances of anything like this happening were zero. “Nobody here thinks the politics in this town is going to change overnight,” said an army colonel from Tennessee with a classic military buzz cut. “All we are saying is that we’re in trouble if they don’t.” I heard his words and saw the person from whom they were issued. It was still a struggle to match them up.

Later it occurred to me that what the group had laid out was within the mainstream of Republican tradition. In the 1860s, Abraham Lincoln unleashed a series of investments that were to unify the continent into one national economy – from the railroads to the public universities. In the early 1900s, Teddy Roosevelt, another Republican, broke up the oil mono­polies, introduced regulation of workplace conditions and set up the first national parks
to preserve the wilderness. Dwight Eisenhower, their fellow alumnus, responded to the Soviet launch of Sputnik in 1957 with massive investments in public education, science and road-building. In a classic of unintended con­sequences, he also created the research agency that went on to develop the internet.

Even Ronald Reagan, the undisputed icon of today’s conservative movement, shepherded through an amnesty for illegal immigrants, closed down thousands of income-tax loopholes and set up a public-private partnership to defend the US’s embattled computer chip ­industry. Reagan once said: “I didn’t leave the Democratic Party, the Democratic Party left me.” Given the Republican Party’s instinct to equate virtually any taxes with socialism nowadays, it looks like Lincoln’s party has left the US military – or at least its upper reaches.

Even with my grasp of polling methodology, I knew a group of 16 officers was too small a sample from which to draw any big ­conclusions. So it was with particular interest, a few weeks after the session, that I came across an article in Foreign Policy on a report issued by the Pentagon, by the mysterious “Y”, entitled “A National Strategic Narrative”. The report made much the same arguments. It paid homage to the famous “long telegram” from Mos­cow by George Kennan, published under the byline “X” in Foreign Affairs in 1947, which argued for a strategy of “containment” of the Soviet Union. In an attempt to get more attention, Admiral Mike Mullen, then chairman of the joint chiefs of staff, and therefore the head of all the US armed services, agreed to allow the names of the two “Y” authors to be revealed. These were Captain Wayne Porter of the US Navy and Colonel Mark “Puck” Mykleby of the US Marine Corps. Both were on loan to Admiral Mullen’s office when they wrote it.

The authors argued that the US could not hope to practise “smart power” abroad if it did not practise “smart growth” at home. Unlike Kennan’s intervention, the article written by “Y” generated little response. Barring a few bloggers, none of the major newspapers or television stations saw it as newsworthy. Kennan had been compelled to reveal that he was “X” after a mounting campaign of public speculation. The authors of “Y” elicited barely a shrug when they volunteered their identities. Yet their piece offered a key insight into the troubled mindset of the US senior military.

Much like the NDU group, Porter and Mykleby argued for a new spirit of “shared ­sacrifice” in America. It was Alpha who gave force to that phrase for me. Having patrolled the skies of Iraq – acting as the “unblinking eye” of the army – Alpha, like many of his colleagues, was disappointed with how the civilians managed that war. “In this country ‘shared sacrifice’ means putting a yellow ribbon around the oak tree and then going shopping,” he said, in reference to George W Bush’s infamous call for Americans to hit the ski slopes and the shopping malls after the 11 September 2001 attacks. The memory still bothered him. “Taxes are the price we pay for civilisation,” he said, in quotation of the jurist, Oliver Wendell Holmes.

America’s ability to reverse her fortunes could come about only through being admired around the world, rather than feared, Alpha said. There was a thin line between being feared and being mocked. “Should we be seen as a hegemon that imposes its will on others, or as a beacon?” he said when I asked whether the US should regain its appetite to promote democracy overseas. “The best thing we can do for democracy around the world is to change our act here at home.”

Alpha’s group had recommended lifting the foreign aid budget by $30bn a year, entirely at the expense of the Pentagon. “We know there’s no lobby in Washington for foreign aid,” he said. In a poll by World Public Opinion a few months earlier, the American public estimated that a quarter of the US federal budget was spent on foreign aid. In fact, Washington spends little more than a dollar on aid for every 99 dollars it spends on something else. The gap between perception and reality is occasionally stunning. In practice, and given the patchy record of the aid industry around the world, it is unlikely more money would buy the kind of goodwill that Alpha’s group would expect for the US – development is a complicated business. But that seemed beside the point. What I took from Alpha and his colleagues was a visceral concern about America’s future.

I picked up the same concern from Admiral Mullen in an interview that he gave me three months before retiring as head of the US military. Mullen was in a talkative mood. In 2010, in the midst of overseeing a 30,000 troop surge to Afghanistan, Mullen had vented alarm about growing US national debt, declaring that it was the country’s biggest threat – greater than that posed by terrorism, weapons of mass destruction and global warming. He had since repeated his point. We met amid the rolling high drama that led up to the last-minute decision in August 2011 to raise the US national debt limit by more than $2trn.

Perched at his utilitarian semi-circular desk, with a bank of television screens behind him, the admiral munched happily through two hot dogs, both of which he had drowned in mustard. It did not slow his word rate. “We are borrowing money from China to build weapons to face down China,” he said. “I mean, that’s a broken strategy. It may be OK now for a while, but it is a failed strategy from a national security perspective.”

Mullen spoke of the need for Washington to take more effective decisions at a time when the US is entering a lengthy phase of fiscal austerity. It was clear he did not think Washington was up to the task. It still hadn’t made a proper account about the events that led up to the September 2008 meltdown in the days that followed the collapse of Lehman Brothers. Nor was there strong reason to be confident that such a meltdown would not recur. “Where were the overseers, as opposed to the finger pointers, which is what they became?” he asked. “Where was the oversight – the helpful, regulatory, legislative oversight to keep us in limits? Because it wasn’t there. It wasn’t there. Where the hell is the accountability for this?”

Mullen’s concerns reminded me of Eisenhower’s famous address in 1961, just before John F Kennedy was inaugurated as president, in which he warned of the dangers posed by the US’s emerging “military-industrial com­plex”. The world has turned at least half circle since then. Nowadays, those in Mullen’s position spend more time worrying about the foreign components that go into US military equipment. The global supply chain is a growing reality for the Pentagon. In such a hyper-integrated world, very little is made purely in America.

The world is changing rapidly, Mullen continued, and the US cannot be expected to do all the heavy lifting. Much of its industrial base, including the naval shipyards and certain kinds of missile-building systems, was now in a “critically fragile” state, he said. “Once you lose that capacity, it’s hard to get back. We’re going to have to have something like a global security strategy that involves our allies and our alliances, so that our industrial capacities are complementary.” In short, America’s allies should share much more of the economic burden. “There is not a country in the world that can do this alone any more,” Mullen told me.

A few weeks after the NDU course finished, Alpha went back to Afghanistan to a war in which he believes the US has again set its heights too high. “We should be more modest in what we think we can achieve,” he said. “The American military was never supposed to be an aid agency.” For Alpha, as for Mullen, American recent history offers a lesson in overreach. The US military has been asked to pull off the impossible in far away places. But whatever it has learned only reinforces its scepticism about what it can achieve. The real challenges are at home.

It is a mindset increasingly shared by the American people, more than seven out of ten of whom tell Gallup they believe their children will be worse off than they are – a strikingly un-American pessimism. Yet it is deeply rooted: a large chunk of the middle class is worse off, or the same, in real terms as their parents. Their contempt for Washington, which seems unable to grapple with the structural challenges facing US competitiveness, keeps growing, whoever is in office. Last year, just 9 per cent said they believed Congress was doing the right thing all or some of the time, which pretty much confined it to “blood relatives and paid staffers”, as the joke goes.

And while Washington prevaricates, the rest of the world keeps expanding its share. In 2000, the US had 31 per cent of world income, according to the IMF. That is now down to 23 per cent, heading towards 17 per cent in the next decade. Yet even Barack Obama, whom Mitt Romney likes to portray as the declinist-in-chief, says, “anyone who says America is in decline doesn’t know what they’re talking about”. To tackle a problem you must first recognise that it exists. That is what they are taught in officer school. For the most part, the US’s problems are not obscure. But the will to confront them appears to be missing in action.

For Alpha, the best illustration of Washington’s falling IQ – among a rich embarrassment of choices – is its reluctance to address the ­festering morass  in the American immigration system. As a nation of immigrants, America is supposed to attract people. “We take the world’s smartest kids and we give them the best education available, and then we put them on a plane back home,” he said. “How smart is that?”

Edward Luce is the author of “Time to Start Thinking: America and the Spectre of Decline” (Little, Brown, £20)