Special Report

Hating America

On September 12, 2001, Jean-Marie Colombani, the editor of Le Monde, famously wrote, "Today we are all Americans." Three years on, it seems that we are all anti-Americans. Hostility to the United States is deeper and broader than at any point in the last 50 years. The Western Europeans, it is often argued, oppose U.S. foreign policy because peace and prosperity have made them soft. But the United States faces almost identical levels of anti-Americanism in Turkey, India, and Pakistan, none of which are rich, postmodern, or pacifist. With the exception of Israel and Britain, no country today has a durable pro-American majority.

In this post-ideological age, anti-Americanism fills the void left by defunct belief systems. It has become a powerful trend in international politics today -- and perhaps the most dangerous. U.S. hegemony has its problems, but a world that reacts instinctively against the United States will be less peaceful, less cooperative, less prosperous, less open, and less stable.

The wave of anti-Americanism is, of course, partly a product of the current Bush administration's policies and, as important, its style. Support for the United States has dropped dramatically since Bush rode into town. In 2000, for example, 75 percent of Indonesians identified themselves as pro-American. Today, more than 80 percent are hostile to Uncle Sam. When asked why they dislike the United States, people in other countries consistently cite Bush and his policies. But the very depth and breadth of this phenomenon suggest that it is bigger than Bush. The term "hyperpower," after all, was coined by the French foreign minister to describe Bill Clinton's America, not George W. Bush's.

Anti-Americanism's ascendance also owes something to the geometry of power. The United States is more powerful than any country in history, and concentrated power usually means trouble. Other countries have a habit of ganging up to balance the reigning superpower. Throughout history, countries have united to defeat hegemonic powers -- from the Hapsburgs to Napoleon to Kaiser Wilhelm and Hitler.

For over 50 years, the United States employed skillful diplomacy to fend off this apparently immutable law of history. U.S. administrations used power in generally benign ways, working through international organizations, fostering an open trading system that helped others grow economically, and providing foreign aid to countries in need. To demonstrate that it was not threatening, the United States routinely gave great respect and even deference to much weaker countries. By crudely asserting U.S. power and disregarding international institutions and alliances, the Bush administration has pulled the curtain on decades of diplomacy and revealed that the United States' constraints are self-imposed: America can, in fact, go it alone. Not surprisingly, the rest of the world resents this imbalance and searches for ways to place obstacles in America's way.

But an equally important force propelling anti-Americanism around the world is an ideological vacuum. Political scientist Francis Fukuyama was right when he noted that the collapse of the Soviet Union also meant the collapse of the great ideological debate on how to organize economic and political life. The clash between socialism and capitalism created political debates and shaped political parties and their agendas across the world for more than a century. Capitalism's victory left the world without an ideology of discontent, a systematic set of ideas that are critical of the world as it exists.

There is always a market for an ideology of discontent -- it allows those outside the mainstream to relate to the world. These beliefs usually form in reaction to the world's dominant reality. So the rise of capitalism and democracy over the last 200 years produced ideologies of opposition from the left (communism, socialism) and from the right (hypernationalism, fascism). Today, the dominant reality in the world is the power of the United States, currently being wielded in a particularly aggressive manner. Anti-Americanism is becoming the way people think about the world and position themselves within it. It is a mindset that extends beyond politics to economic and cultural realms. So, in recent elections in Brazil, Germany, Pakistan, Kuwait, and Spain, the United States became a campaign issue. In all these places, resisting U.S. power won votes. Nationalism in many countries is being defined in part as anti-Americanism: Can you stand up to the superpower?

Much has been written about what the United States can do to help arrest and reverse these trends. But it is worth putting the shoe on the other foot for a moment. Imagine a world without the United States as the global leader. Even short of the imaginative and intelligent scenario of chaos that British historian Niall Ferguson outlined in this magazine (see "A World Without Power," July/August 2004), it would certainly look grim. There are many issues on which the United States is the crucial organizer of collective goods. Someone has to be concerned about terrorism and nuclear and biological proliferation. Other countries might bristle at certain U.S. policies, but would someone else really be willing to bully, threaten, cajole, and bribe countries such as Libya to renounce terror and dismantle their WMD programs? On terror, trade, AIDs, nuclear proliferation, U.N. reform, and foreign aid, U.S. leadership is indispensable.

The temptation to go its own way will be greatest for Europe, the only other player with the resources and tradition to play a global role. But if Europe defines its role as being different from the United States -- kinder, gentler, whatever -- will that really produce a more stable world? U.S. and European goals on most issues are quite similar. Both want a peaceful world free from terror, with open trade, growing freedom, and civilized codes of conduct. A Europe that charts its own course just to mark its differences from the United States threatens to fracture global efforts -- whether on trade, proliferation, or the Middle East. Europe is too disunited to achieve its goals without the United States; it can only ensure that America's plans don't succeed. The result will be a world that muddles along, with the constant danger that unattended problems will flare up disastrously. Instead of win-win, it will be lose-lose -- for Europe, for the United States, and for the world.

Special Report

Free Money

Fiscal irresponsibility is politically attractive, but it is equivalent to believing in something for nothing. Basing the policy of the world's dominant economy on the hope that the normal rules of fiscal prudence do not apply is an exceedingly dangerous idea.

Large and sustained deficits in the United States threaten not only U.S. prosperity but the world's economic health as well. Massive public borrowing in the United States is already absorbing other nations' savings to finance the world's richest country. And it may soon raise interest rates around the world and slow global growth. U.S. profligacy could even invite an international financial crisis that would bring enormous human costs everywhere.

Small countries cannot afford to behave irresponsibly for very long; their currencies lose value and their governments cannot borrow money. But investors give the United States more leeway. Its debt -- the famed U.S. Treasury bonds -- is still regarded as a very safe place to park money. The persistent appeal of U.S. bonds is leading politicians in the United States to believe that the ordinary rules of global finance don't apply to them. When they realize that rules are rules, it may be too late; the world could be caught in a financial crisis that has escalated beyond control.

Sermons on fiscal rectitude often fall on deaf ears in the United States. Everyone likes a free lunch if they can get it. Raising taxes and cutting spending are always painful, and political leaders have to be convinced that the pain is worth it. But a glance at the recent past should wake the slumbering body politic.

In the early 1980s, the Reagan administration cut income tax rates and increased defense outlays without restraining other spending. Supporters of those tax cuts predicted they would stimulate economic growth so powerfully that deficits would vanish. They claimed that deficits did not matter because government borrowing did not raise interest rates. They were wrong on both counts, and the free lunch proved expensive. Fortunately, the costs of high deficits in the 1980s evoked a bipartisan response in the United States. Politicians in both parties voted for tax increases and forced themselves to restrain spending growth. Fiscal responsibility and a strong economy turned the deficits into surpluses by the end of the 1990s.

Irresponsibility is back. Once again, a U.S. administration is touting huge tax cuts as stimulants to economic growth and massively increasing military spending. Once again, deficits initially blamed on recession persist even as the economy recovers. If the United States does not quickly change course, deficits will remain around 3.5 percent of gross domestic product for the next decade and then escalate rapidly as an aging society forces more spending for social security and health care.

In many ways, the current deficits are even more dangerous than those of the 1980s. The retirement of the baby boom generation is two decades closer. Moreover, the United States has shifted from being the world's largest creditor to being the world's largest debtor, and a far more substantial portion of U.S. public debt is held by foreigners, especially Asian central banks. This dependence makes the United States vulnerable to the shifting moods of international investors. A day may come when wary foreign investors demand high interest rates as compensation for holding their assets in U.S. dollars. Worst of all, the political will to deal with deficits has evaporated. The spending rules adopted in the 1990s have lapsed, and the bipartisan coalition to restore fiscal discipline has splintered.

The most likely scenario is continuing deficits financed largely by borrowing from the rest of the world. The principal victims of this fiscal irresponsibility will be Americans, who will suffer higher interest rates, slower growth, more of their tax money going to debt service, and higher inflation. The larger debt will be passed on to future taxpayers, who will simultaneously have to grapple with the burdens of a rapidly aging population. Eventually, the government will raise taxes and cut spending by more than would have been necessary if action were taken earlier. The weakness in the United States will almost inevitably sap the strength of the world economy.

That's the best case. An even darker possibility is that investors (including many Americans) will lose confidence in the ability of the United States to handle its fiscal affairs and will move their funds elsewhere. Such a massive migration of capital would precipitate a plunge in the dollar and generate a spike in interest rates and inflation in the United States. This tsunami in the world's largest economy would disrupt international markets and devastate many developing countries.

Avoiding possible disaster, or even the more likely slow erosion of prosperity, will test U.S. political leadership. Will elected officials recognize that common-sense rules of fiscal responsibility apply to the United States as well as to other countries? Will they make the tough choices needed to restore fiscal sanity to the world's most important economy?