Category: Democracy

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Abandoning Ukraine could be a multitrillion-dollar mistake

Rick Newman, Senior Columnist – January 24, 2024

While Republicans in Congress block further aid for Ukraine, Russia is gaining an edge in its bid to extend its territory right up to the NATO military alliance’s eastern border. Ukraine is running short of crucial weapons while Russia’s economy is now mobilized for war and cranking out more artillery shells than the United States and Europe combined.

The United States may yet buck up Ukraine, but if it doesn’t, the isolationist obstruction of some Republicans in Washington could turn out to be an epic mistake that costs Americans vastly more than it saves. History is replete with examples of pennywise decisions that led to disastrous outcomes — and many analysts think China, North Korea, and Iran could follow Russia’s expansionary example if America goes soft on Ukraine, with devastating economic consequences.

So far, the United States has provided about $46 billion in military aid to Ukraine, plus another $29 billion in financial assistance. The military aid amounts to less than 5% of the US defense budget, which exists in part to counter Russia. President Biden wants another $60 billion for Ukraine, and a bipartisan group of senators has crafted legislation that would provide much of that aid, while also funding immigration reforms and other priorities.

The snag is a faction of House Republicans who say they won’t vote for Ukraine aid unless it’s coupled with draconian immigration changes Democrats are dead set against. Cheering them on is Donald Trump, the likely Republican presidential nominee, who has suggested he’d end US support for Ukraine altogether.

The Republican withdrawal on Ukraine suggests Russian president Vladimir Putin has guessed right. Putin obviously hoped for a quick Ukrainian surrender after Russian forces invaded in February 2022, which he didn’t get. But Putin’s Plan B was a long war in which Western resolve to help Ukraine would fade well before Russia’s ability to keep the war going.

That seems to be happening. While a majority of Americans still want to help Ukraine, Republican support has dropped from 80% when the war started in 2022 to just 50% now, giving conservative Republicans in Congress plenty of leeway to cut off Ukraine. As Putin well knows, a small group of naysayers can block US policy if the minority party controls just one chamber of Congress, as Republicans do in the House.

If Republican isolationists get their way, the ramifications could stretch far beyond Europe. As Hal Brands and many other foreign policy experts argue, the American abandonment of Ukraine could be a green light for China, North Korea, and Iran to attempt their own land grabs on the premise that they’d be able to outlast Western resistance led by a fickle United States.

China may be the most unnerving scenario. President Xi Jinping seems more determined than any Chinese leader of the last 25 years to “reunite” communist China with democratic Taiwan. That would have to involve military intervention, given that Taiwan has no interest in a reunion.

The idea that an isolationist United States could stand on the sidelines and remain unscathed is folly.

A recent analysis by the Rhodium Group found that a Chinese blockade of Taiwan, without an outright invasion, could cost the world economy $2 trillion, mainly from disrupted trade with both Taiwan and China. A Bloomberg analysis finds that a Chinese invasion of Taiwan would raise the cost to $10 trillion, “dwarfing” the economic cost of the war in Ukraine, the COVID pandemic, and the 2008 financial crash.

In an invasion scenario, the Taiwanese and Chinese economies would crater while US GDP would plunge by 6.7% — the worst wipeout since the Great Depression in the 1930s. In a milder blockade scenario, US GDP would still drop by 3.3%, also unprecedented since the Depression.

China would likely try to take control of Taiwan’s advanced semiconductor industry, which could cause acute shortages of electronics, cars, and more sophisticated products that would make the empty shelves of the COVID pandemic look like a time of plenty.

Loss of trade with China would be devastating, too. Donald Trump and other nationalists want to “decouple” the US economy from China’s, but that’s facile and naive. Despite efforts by both US political parties to pull away from China, the two countries hit a record level of trade in 2022 and remain deeply intertwined, with China still supplying huge amounts of pharmaceutical ingredients, auto parts, lithium-ion batteries, lower-end computer chips, and hundreds of other things. In many cases there’s simply no other reliable source for the quantity of stuff Americans consume. Reestablishing US supply chains for all of those goods could take decades and be prohibitively expensive.

Iran and North Korea are lesser economic problems, given that the United States has no meaningful direct trade with those countries. Yet North Korean dictator Kim Jong Un has renounced his nation’s longstanding goal of peacefully reuniting with South Korea. Some analysts see unusual signs of preparation for war, which would endanger the world’s ninth-largest exporter, whose commodities include Samsung electronics and Hyundai automobiles.

Iran aims to be the dominant power in the Middle East. Its main leverage over adversaries would be the ability to interdict Persian Gulf oil shipments, plus a nuclear weapons program that may soon be able to threaten Israel and maybe Europe. The United States is less dependent on Middle East oil than during the energy crises of the 1970s, but an energy crunch could still reignite inflation and cause a recession.

In all of these scenarios, the aggressor nation would pay a steep price in treasure, blood, and possibly prestige. So maybe they wouldn’t try it. But the same rationale applied to Putin before he ordered an invasion that has damaged the Russian economy and caused several hundred thousand Russian deaths. Yet Putin still faces no serious domestic opposition. The Russian economy is faring better than many expected and Putin seems to be finding the resources to wage his war indefinitely.

History suggests that billions of dollars in prevention is way better than trillions in triage. The United States tried to stay out the mayhem that led to both world wars, but got dragged into them anyway. The result was 117,000 American deaths in World War I and 407,000 dead in World War II.

Many historians think American suggestions that it would not defend South Korea after World War II influenced the communist North’s decision to invade in 1950 — which brought the United States into the war after all, leading to 37,000 American deaths. Anybody who feels sure the United States can stay out of big faraway wars probably needs to do a little more research about what happened the last time we tried to stay out.