Palantir Drops 10% on Report of Pentagon Slashing Budget

Americans benefit a lot from being the world superpower, a lot more than they know, in ways that aren't apparent until they're gone. In 10 years it will be obvious what a mistake it was to intentionally renounce this position.

I think its proponents imagine a world where Russia slowly reassembles territories it lost in the '91 and maybe China takes Taiwan with some short wars and the United States just chills out. In practice the United States will likely aggressively pursue its interests in North, Central and South America as well as the Middle East and do so in a destructive fashion. We can also see people manufacturing consent on various male-audience podcasts for a hot war along the Mexican border in the name of destroying the cartels. The idea that an 8% or even 16% budget cut the pentagon could somehow neuter our ability to project power at our doorstep is naive.

However you want to frame globalism, nationalism, etc. I think it’s a perfectly rational reason to think, “huh, maybe it doesn’t just have to be pork barrel spending and to invade countries with oil…”

During the Cold War, Washington used free trade as a bribe to get countries to consult with the Pentagon on security issues. It was able to do that because although it was mostly decoupled from international trade, the American economy was so large that what little international trade it did engage in (as a percentage of total US GDP) was quite valuable to smaller economies.

I guess governance quality in the US could have declined so much since the end of the Cold War that narrow business interests have gotten control of US trade policy, but for many decades Washington cared more about preventing the rise of a competitor (in the Soviet Union) that could eventually challenge it militarily than about using international trade to improve American economic performance -- because the US economy ran well without international trade.

The main reason the US had a dominant navy is that it is the most efficient way for the US to prevent the most potent military threat against it: namely, some other country's navy showing up on American shores and bombarding things or interfering with coastal shipping from one US port to another US port. The fact that this same navy has been useful for keeping the world's sea lanes free from piracy and privateering has been just a nice secondary effect. (Similarly, Britain's global empire was a secondary effect of centuries of British efforts to prevent Dutch, French, Spanish and North African fleets from raiding the British coast and raiding British ships operating near the British coast).

I think there’s a huge natural reason for both parties to get behind significant and aggressive cost cutting, which is the accumulating debt and wasted spending on interest payments. Reductions in costs, even outside mandatory spending, will have an effect on reducing the amount of debt and burden of financing. They will also make the economy more resilient since it will be less sensitive to interest rates. This is critical to retaining a stable economy even when other countries, such as China, are in difficult economic positions.

> A once in a century opportunity to end the age of American empire and reorient America for the inevitable multipolar future.

If there is a multipolar future, I hope the other superpowers are countries that are relatively peaceful and share values like free speech. I don’t trust China to be that country as long as it is led by the CCP, as long as it continues to hold onto (or threaten) territories that aren’t rightfully a part of China (like Tibet, Xinjiang, Hong Kong, Taiwan). It’s in America’s interests to prevent a multipolar future since the only other competitor is China. Maybe that will change - I’d be more willing to accept a future where the other superpowers are Europe or India or whatever.

But any multipolar situation requires the US cut spending and fast. If there is a true competiting power, it will mean America will have to live with the realities of a weaker dollar, high debt, and other headwinds (like low growth, high interest rates, inflation).