I’m thinking aloud here. When the good Ol’ US of A was borrowing money to pay for wars in Iraq, Afghanistan, clandestine wars in Syria, Yemen, Libya, The People’s Republic of China bought that debt. Whenever the government spends more than it collects in taxes, it has to issue bonds to pay those bills. Who buys the bonds are governments, banks, insurance companies, or individuals.
Right now the guerre du jour takes place in Ukraine, a poor country in Eastern Europe, run by a leadership class with a penchant for stealing. We are sending untold billions in cash and armaments to this country, where auditors and accountants are scarcer than fans of the WNBA.
What could possibly go wrong?
Meanwhile, on the other side of the world, the Peoples’ Republic Of China is hinting at the prospect of a military takeover of a rebellious province, the island of Taiwan. It is the home of the Kwomintang (KMT), the Nationalist party of Chiang Kai Shek, Chairman Mao’s adversary in the Revolution of 1949. With justification, China sees the dispute with Taiwan as an internal matter within China.
The tie between Taiwan and Mainland China is fairly clear. Who controls Taiwan is an internal question to the Chinese. The United States is making all kinds of bellicose gestures and remarks about defending Taiwan. It is looking like 2024’s war, arriving just in time to prop up the sagging fortunes of the Biden Administration.
Meanwhile, why would the Chinese want to damage the economy of a nation that owes them a whole lotta money? Diabolically, or theoretically, the US could fight a war with China, with debt financed by China. Since the days of WW Two and The Cold War, war has proven to be good business. Since one of the last big domestic industries is based on defence (AKA “war” ), don’t look for anybody in Washington or Wall Street or Silicon Valley to eschew this folly.
If there’s a war, lots of people could die, people like your spouse, children and grandchildren. Maybe even you. One would think the Government would want to avoid this outcome. One better think again. I’m not looking for cooler heads to prevail in Washington. The American War State is a bipartisan coalition of Republicans and Democrats. They will unfurl the flags and conflate any actual or potential conflict with World War Two, the last so-called “Good War”. They’ve been doing this since 1945. Sadly, it has yet to wear thin.