What does the $28 trillion national debt mean for a US national security strategy on China?
Earlier this month the Senate Foreign Relations Committee introduced the Strategic Competition Act of 2021, a bill that seeks to counter the Chinese Communist Party through increased spending that would allow us to compete in areas of infrastructure and innovation. The fear of China surpassing the US is a bipartisan one that could lead to a divided Senate passing this bill aimed to put pressure on Beijing over their violations of human rights, intellectual property theft, and the threat of dethroning the US as the primary influence in military, economic, political, and ideological spheres.
An easily forgettable, but at least equally important issue, is our national debt. Despite calls from the previous administration to disrupt the status quo , the Trump administration managed to increase the budget by nearly 40 percent. Sadly, the ballooning of US debt is not a partisan issue, reflecting a trend that will burden future generations financially and reverse our already decaying position as a great world power. Though the relationship between our national debt and our US national security strategy — particulary on China — is hardly in the headlines, it is a link that deserves more attention.
While much of the conversation around the US being overtaken by China may be alarmist talk for some, there is merit to the argument, especially when the US is financing its future with Beijing’s help. Thanks to our geography that puts us across the globe from adversaries and next to friendly neighbors to the north and south, the US has held on to being the world’s hegemonic power. However, globalism has undoubtedly shaped the level in which we interact with one another — individuals and states alike. Debt apologists argue that there is no reason to fear. Fiscal conservatives have long worried about an impending debt crisis that would crowd out other spending priorities, yet such a catastrophe has not occurred. The Fed has also kept interest rates low, which have favorably affected payments. Why the alarm then?
The start of 2021 presented hope after the catastrophe in many ways that was the previous year, but 2021 also presented a new national debt record, one that is now at just over $28 trillion. The challenge remains that there is no consensus on how much debt is “too much,” even among budget experts. Perhaps this is the wrong question to ask though. Currently, our adversary holds a close second (after Japan) for the amount of outstanding US debt it owns. Foreign countries “own” our debt by way of US Treasury securities. Though China does not publish how much in securities it owns, it was estimated at $1.06 trillion at the end of November 2020. While it is unlikely that this debt will be sold to harm the US — since China has an interest to preserve the dollar and keep the American economy afloat — this opportunity provides them with a nuclear option that can be used in extreme cases such as conflicts over Taiwanese independence or freedom of navigation in the South China Sea.
The substantive drive to challenge China, in line with previous administrations, makes sense on the surface. The US should serve as a model for democracy, innovation, and free markets, for others to hopefully emulate. And while bipartisanship is something to be desired in Washington, spending more money that we do not have to counter a great power that we are financially beholden to, is not responsible — adversary or not. It is time that Democrats and Republicans focus on a national security strategy that will lower deficit spending, build beneficial alliances in the Indo-Pacific, and halt any trade wars. It is then that the US will build the strongest strategy on China and break away from the debt that has contributed to our decline as a global hegemon.
