Keidel, Senior Associate, Carnegie Endowment for International Peace, 05 (Albert, June, “China's Currency: Not the Problem” ,Carnegie Endowment, Policy Brief #39, http://carnegieendowment.org/files/PB39.Keidel.FINAL.pdf)
Economists all agree that in a well-functioning world market, any country will have deficits with some countries and surpluses with others. Some of these surpluses and deficits will be large. Yet a large deficit with one trading partner does not by itself prove that the partner has a bad exchange rate. The more meaningful statistic is a country’s global trade balance, the total of all its partner trade balances—and China’s global trade surplus is not excessively or unfairly large. Two tests make this clear. The first test is a country’s trade surplus as a share of its gross domestic product (GDP). A large share usually
indicates unsuitably weak domestic demand. The second test is the size of a country’s global surplus as a share of the total U.S. trade deficit. Given the tangle of global supply
linkages, a country’s world surplus, rather than its country-to-country share of the U.S. trade deficit, is the true test of its contribution to global imbalances. Table 1 shows that, compared with many other countries, China’s 2003 and 2004 world trade surpluses were not large as a share of GDP—both roughly 3 percent. These surpluses are smaller than those for Germany, the Netherlands, Thailand, Argentina, Malaysia, and Singapore. China’s share of the total U.S. trade deficit reveals similar results. Table 2 shows that China’s global surpluses in 2003 and 2004 were, respectively, 7 and 8 percent of the U.S. deficit. These are similar to Singapore’s share and much less than those for Japan, Germany, the oil exporters, and the entire euro currency area. The surpluses from Japan, the oil exporters, and the euro area together account for more then 60 percent of the U.S. trade deficit. China is only a minor factor.
The U.S. economy, according to doubters, rests on an unsustainable accumulation of foreign debt. Fueled by government profligacy and low private savings rates, the current account deficit-the difference between what U.S. residents spend abroad and what they earn abroad in a year--now stands at almost six percent of GDP; total net foreign liabilities are approaching a quarter of GDP. Sudden unwillingness by investors abroad to continue adding to their already large dollar assets, in this scenario, would set off a panic, causing the dollar to tank, interest rates to skyrocket, and the U.S. economy to descend into crisis, dragging the rest of the world down with it. Despite the persistence and pervasiveness of this doomsday prophecy, U.S. hegemony is in reality solidly grounded: it rests on an economy that is continually extending its lead in the innovation and application of new technology, ensuring its continued appeal for foreign central banks and private investors. The dollar's role as the global monetary standard is not threatened, and the risk to U.S. financial stability posed by large foreign liabilities has been exaggerated. To be sure, the economy will at some point have to adjust to a decline in the dollar and a rise in interest rates. But these trends will at worst slow the growth of U.S. consumers' standard of living, not undermine the United States' role as global pacesetter. If anything, the world's appetite for U.S. assets bolsters U.S. predominance rather than undermines it.
A massive nuclear terrorist attack is inevitable by 2013
Allison 10 - Douglas Dillon professor of government and director of the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government (Graham, “A Failure to Imagine the Worst,” Foreign Policy, January 25th, http://www.foreignpolicy.com/articles/2010/01/25/a_failure_to_imagine_the_worst?page=0,0)
In his first speech to the U.N. Security Council, U.S. President Barack Obama challenged members to think about the impact of a single nuclear bomb. He said: "Just one nuclear weapon exploded in a city-- be it New York or Moscow, Tokyo or Beijing, London or Paris -- could kill hundreds of thousands of people." The consequences, he noted, would "destabilize our security, our economies, and our very way of life."
Before the Sept. 11, 2001, assault on the World Trade Center and Pentagon, who could have imagined that terrorists would mount an attack on the American homeland that would kill more citizens than Japan did at Pearl Harbor? As then-Secretary of State Condoleezza Rice testified to the 9/11 Commission: "No one could have imagined them taking a plane, slamming it into the Pentagon ... into the World Trade Center, using planes as missiles." For most Americans, the idea of international terrorists conducting a successful attack on their homeland, killing thousands of citizens, was not just unlikely. It was inconceivable.
As is now evident, assertions about what is "imaginable" or "conceivable," however, are propositions about our minds, not about what is objectively possible.
Prior to 9/11, how unlikely was a megaterrorist attack on the American homeland? In the previous decade, al Qaeda attacks on the World Trade Center in 1993, U.S. embassies in Kenya and Tanzania in 1998, and the USS Cole in 2000 had together killed almost 250 and injured nearly 6,000. Moreover, the organization was actively training thousands of recruits in camps in Afghanistan for future terrorist operations.
Thinking about risks we face today, we should reflect on the major conclusion of the bipartisan 9/11 Commission established to investigate that catastrophe. The U.S. national security establishment's principal failure prior to Sept. 11, 2001, was, the commission found, a "failure of imagination." Summarized in a single sentence, the question now is: Are we at risk of an equivalent failure to imagine a nuclear 9/11? After the recent attempted terrorist attack on Northwest Airlines Flight 253, this question is more urgent than ever.
The thought that terrorists could successfully explode a nuclear bomb in an American city killing hundreds of thousands of people seems incomprehensible. This essential incredulity is rooted in three deeply ingrained presumptions. First, no one could seriously intend to kill hundreds of thousands of people in a single attack. Second, only states are capable of mass destruction; nonstate actors would be unable to build or use nuclear weapons. Third, terrorists would not be able to deliver a nuclear bomb to an American city. In a nutshell, these presumptions lead to the conclusion: inconceivable.
Why then does Obama call nuclear terrorism "the single most important national security threat that we face" and "a threat that rises above all others in urgency?" Why the unanimity among those who have shouldered responsibility for U.S. national security in recent years that this is a grave and present danger? In former CIA Director George Tenet's assessment, "the main threat is the nuclear one. I am convinced that this is where [Osama bin Laden] and his operatives desperately want to go." When asked recently what keeps him awake at night, Secretary of Defense Robert Gates answered: "It's the thought of a terrorist ending up with a weapon of mass destruction, especially nuclear."
Leaders who have reached this conclusion about the genuine urgency of the nuclear terrorist threat are not unaware of their skeptics' presumptions. Rather, they have examined the evidence, much of which has been painstakingly compiled here by Rolf Mowatt-Larssen, former head of the CIA's terrorism and weapons-of-mass-destruction efforts, and much of which remains classified. Specifically, who is seriously motivated to kill hundreds of thousands of Americans? Osama bin Laden, who has declared his intention to kill "4 million Americans -- including 2 million children." The deeply held belief that even if they wanted to, "men in caves can't do this" was then Pakistani President Pervez Musharraf's view when Tenet flew to Islamabad to see him after 9/11. As Tenet (assisted by Mowatt-Larssen) took him step by step through the evidence, he discovered that indeed they could. Terrorists' opportunities to bring a bomb into the United States follow the same trails along which 275 tons of drugs and 3 million people crossed U.S. borders illegally last year.
In 2007, Congress established a successor to the 9/11 Commission to focus on terrorism using weapons of mass destruction. This bipartisan Commission on the Prevention of WMD Proliferation and Terrorism issued its report to Congress and the Obama administration in December 2008. In the commission's unanimous judgment: "it is more likely than not that a weapon of mass destruction will be used in a terrorist attack somewhere in the world by the end of 2013."
Faced with the possibility of an American Hiroshima, many Americans are paralyzed by a combination of denial and fatalism. Either it hasn't happened, so it's not going to happen; or, if it is going to happen, there's nothing we can do to stop it. Both propositions are wrong. The countdown to a nuclear 9/11 can be stopped, but only by realistic recognition of the threat, a clear agenda for action, and relentless determination to pursue it.
Overseas bases become a lightning ground for terrorism and makes conflicts more likely to escalate
Vine 09 - Assistant Prof of Anthropology at American University (David, Too Many Overseas Bases, FPIF, feb 25)
Bases abroad have become a major and unacknowledged “face” of the United States, frequently damaging the nation’s reputation,engendering grievances and anger, and generally creating antagonistic rather than cooperative relationships between the United States and others. Most dangerously, as we have seen in Saudi Arabia and Yemen, and as we are seeing in Iraq and Afghanistan, foreign bases create breeding grounds for radicalism, anti-Americanism, and attacks on the United States, reducing, rather than improving, our national security. Proponents of maintaining the overseas base status quo will argue, however, that our foreign bases are critical to national and global security. A closer examination shows that overseas bases have often heightened military tensions and discouraged diplomatic solutions to international conflicts. Rather than stabilizing dangerous regions, our overseas bases have often increased global militarization, enlarging security threats faced by other nations who respond by boosting military spending (and in cases like China and Russia, foreign base acquisition) in an escalating spiral. Overseas bases actually make war more likely, not less. Nuclear terrorism is an existential threat—it escalates to nuclear war with Russia and China.
[ Professor of Strategic Studies and Director of the Centre for Strategic Studies: New Zealand at the Victoria University of Wellington (Robert, July, “After a Terrorist Nuclear Attack: Envisaging Catalytic Effects,” Studies in Conflict & Terrorism, Volume 33, Issue 7, Available Online to Subscribing Institutions via InformaWorld)] A terrorist nuclear attack, and even the use of nuclear weapons in response by the country attacked in the first place, would not necessarily represent the worst of the nuclear worlds imaginable. Indeed, there are reasons to wonder whether nuclear terrorism should ever be regarded as belonging in the category of truly existential threats. A contrast can be drawnherewith the global catastrophe that would come from a massive nuclear exchange between two or more of the sovereign states that possess these weapons in significant numbers. Even the worst terrorism that the twenty-first century might bring would fade into insignificance alongside considerations of what a general nuclear war would have wrought in the Cold War period. And it must be admitted that as long as the major nuclear weapons states have hundreds and even thousands of nuclear weapons at their disposal, there is always the possibility of a truly awful nuclear exchange taking place precipitated entirely by state possessors themselves. But these two nuclear worlds—a non-state actor nuclear attack and a catastrophic interstate nuclear exchange—are not necessarily separable. It is just possible that some sort of terrorist attack, and especially an act of nuclear terrorism, could precipitate a chain of events leading to a massive exchange of nuclear weapons between two or more of the states that possess them. In this context, today’s and tomorrow’s terrorist groups might assume the place allotted during the early Cold War years to new state possessors of small nuclear arsenals who were seen as raising the risks of a catalytic nuclear war between the superpowers started by third parties. These risks were considered in the late 1950s and early 1960s as concerns grew about nuclear proliferation, the so-called n+1 problem. It may require a considerable amount of imagination to depict an especially plausible situation where an act of nuclear terrorism could lead to such a massive inter-state nuclear war. For example, in the event of a terrorist nuclear attack on the United States, it might well be wondered just how Russia and/or China could plausibly be brought into the picture, not least because they seem unlikely to be fingered as the most obvious state sponsors or encouragers of terrorist groups. They would seem far too responsible to be involved in supporting that sort of terrorist behavior that could just as easily threaten them as well. Some possibilities, however remote, do suggest themselves. For example, how might the United States react if it was thought or discovered that the fissile material used in the act of nuclear terrorism had come from Russian stocks,40 and if for some reason Moscow denied any responsibility for nuclear laxity? The correct attribution of that nuclear material to a particular country might not be a case of science fiction given the observation by Michael May et al. that while the debris resulting from a nuclear explosion would be “spread over a wide area in tiny fragments, its radioactivity makes it detectable, identifiable and collectable, and a wealth of information can be obtained from its analysis: the efficiency of the explosion, the materials used and, most important … some indication of where the nuclear material came from.”41 Alternatively, if the act of nuclear terrorism came as acomplete surprise, and American officials refused to believe that a terrorist group was fully responsible (or responsible at all) suspicion would shift immediately to state possessors. Ruling out Western ally countrieslike the United Kingdom and France, and probably Israel and India as well, authorities in Washington would be left with a very short list consisting of North Korea, perhaps Iran if its program continues, and possibly Pakistan. But at what stage would Russia and China be definitely ruled out in this high stakes game of nuclear Cluedo?In particular, if the act of nuclear terrorism occurred against a backdrop of existing tension in Washington’s relations with Russia and/or China, and at a time when threats had already been traded between these major powers, would officials and political leaders not be tempted to assume the worst? Of course, the chances of this occurring would only seem to increase if the United States was already involved in some sort of limited armed conflict with Russia and/or China, or if they were confronting each other from a distance in a proxy war, as unlikely as these developments may seem at the present time. The reverse might well apply too: should a nuclear terrorist attack occur in Russia or China during a period of heightened tension or even limited conflict with the United States, could Moscow and Beijing resist the pressures that might rise domestically to consider the United States as a possible perpetrator or encourager of the attack? Washington’s early responseto a terrorist nuclear attack on its own soil might also raise the possibility of an unwanted (and nuclear aided) confrontation with Russia and/or China. For example, in the noise and confusion during the immediate aftermath of the terrorist nuclear attack, the U.S. president might be expected to place the country’s armed forces, including its nuclear arsenal, on a higher stage of alert. In such a tense environment, when careful planning runs up against the friction of reality, it is just possible that Moscow and/or China might mistakenly read this as a sign of U.S. intentions to use force (and possibly nuclear force) against them. In that situation, the temptations to preempt such actions might grow, although it must be admitted that any preemption would probably still meet with a devastating response. As part of its initial response to the act of nuclear terrorism (as discussed earlier) Washington might decide to order a significant conventional (or nuclear) retaliatory or disarming attack against the leadership of the terrorist group and/or states seen to support that group. Depending on the identity and especially the location of these targets, Russia and/or China might interpret such action as being far too close for their comfort, and potentially as an infringement on their spheres of influence and even on their sovereignty. One far-fetched but perhaps not impossible scenario might stem from a judgment in Washington that some of the main aiders and abetters of the terrorist action resided somewhere such as Chechnya, perhaps in connection with what Allison claims is the “Chechen insurgents’ … long-standing interest in all things nuclear.”42 American pressure on that part of the world would almost certainly raise alarms in Moscow that might require a degree of advanced consultation from Washington that the latter found itself unable or unwilling to provide. There is also the question of how other nuclear-armed states respond to the act of nuclear terrorism on another member of that special club. It could reasonably be expected that following a nuclear terrorist attack on the United States, both Russia and China would extend immediate sympathy and support to Washington and would work alongside the United States in the Security Council. But there is just a chance, albeit a slim one, where the support of Russia and/or China is less automatic in some cases than in others. For example, what would happen if the United States wished to discuss its right to retaliate against groups based in their territory? If, for some reason, Washington found the responses of Russia and China deeply underwhelming, (neither “for us or against us”) might it also suspect that they secretly were in cahoots with the group, increasing (again perhaps ever so slightly) the chances of a major exchange. If the terrorist group had some connections to groups in Russia and China, or existed in areas of the world over which Russia and China held sway, and if Washington felt that Moscow or Beijing were placing a curiously modest level of pressure on them, what conclusions might it then draw about their culpability? If Washington decided to use, or decided to threaten the use of, nuclear weapons, the responses of Russia and China would be crucial to the chances of avoiding a more serious nuclear exchange. They might surmise, for example, that while the act of nuclear terrorism was especially heinous and demanded a strong response, the response simply had to remain below the nuclear threshold. It would be one thing for a non-state actor to have broken the nuclear use taboo, but an entirely different thing for a state actor, and indeed the leading state in the international system, to do so. If Russia and China felt sufficiently strongly about that prospect, there is then the question of what options would lie open to them to dissuade the United States from such action: and as has been seen over the last several decades, the central dissuader of the use of nuclear weapons by states has been the threat of nuclear retaliation. If some readers find this simply too fanciful, and perhaps even offensive to contemplate, it may be informative to reverse the tables. Russia, which possesses an arsenal of thousands of nuclear warheads and that has been one of the two most important trustees of the non-use taboo, is subjected to an attack of nuclear terrorism. In response, Moscow places its nuclear forces very visibly on a higher state of alert and declares that it is considering the use of nuclear retaliation against the group and any of its state supporters. How would Washington view such a possibility? Would it really be keen to support Russia’s use of nuclear weapons, including outside Russia’s traditional sphere of influence? And if not, which seems quite plausible, what options would Washington have to communicate that displeasure? If China had been the victim of the nuclear terrorism and seemed likely to retaliate in kind, would the United States and Russia be happy to sit back and let this occur? In the charged atmosphere immediately after a nuclear terrorist attack, how would the attacked country respond to pressure from other major nuclear powers not to respond in kind? The phrase “how dare they tell us what to do” immediately springs to mind. Some might even go so far as to interpret this concern as a tacit form of sympathy or support for the terrorists. This might not help the chances of nuclear restraint.