Decline Watch: Can we save America by ditching Taiwan?
By Joshua Keating Friday,
November 11, 2011
The New York Times has a very
strange op-ed today from Paul V. Kane, a former international
security fellow at the Harvard Kennedy School. The piece makes the case that
the U.S. should trade Taiwan to China for a deal on debt. Here's the argument:
There are dozens of initiatives President Obama
could undertake to strengthen our economic security. Here is one: He should
enter into closed-door negotiations with Chinese leaders to write off the $1.14
trillion of American debt currently held by China in exchange for a deal to end
American military assistance and arms sales to Taiwan and terminate the current
United States-Taiwan defense arrangement by 2015.
This would be a most precious prize to the cautious
men in Beijing, one they would give dearly to achieve. After all, our
relationship with Taiwan, as revised in 1979, is a vestige of the cold war.
Kane argues that with this one bold stroke, Obama can "correct the
country’s course, help assure his re-election, and preserve our children’s
future." It could also "pressure Beijing to end its political and
economic support for pariah states like Iran, North Korea and Syria and to
exert a moderating influence over an unstable Pakistan."
Decline-o-meter: Giving this a two for the fact that we've gotten to the point where a
suggestion like this is being featured on a prominent op-ed page. I'm
all for counter-intuitive thinking, and intelligent people can disagree on the
wisdom of the current U.S. Taiwan policy, but like most magic bullet solutions
to major international crises, this makes absolutely no sense
1. Why would China take this deal? According to the figures Kane
himself cites, Beijing will spend around $500 billion over the next decade on
Taiwan-related defense spending. So a $1.14 trillion debt write-off isn't
really a bargain. Obviously Taiwan is a major priority for Beijing. But its
trade relationship and relative economic position with the U.S. is a much, much
bigger one.
2. U.S. debt is approaching $15 trillion. Lowering that to $14 trillion
isn't going to "save our economy". And I can't imagine a write-off on
the scale doing wonders for the U.S. credit rating.
3. How exactly will this help Obama's reelection chances? I've always
thought the argument that Obama is "selling out" U.S. allies was
overblown, but it would be a bit hard to refute if he literally sold a
U.S. ally.
4. Even if this deal magically resolved the Taiwan situation, what does
that have to do with Iran, North Korea, Syria, or Pakistan -- countries where
China has completely different interests at stake? If anything, it takes
a bargaining chip off the table.
Flawed as it is, the idea got me thinking. Canada holds about $90 billion in U.S. debt. Maybe they'd
take a Dakota or two for it.
