Bush's foreign policy is not only psychotic, it's shortsighted and stupid.

Every year, the United States spends nearly 300-500 billion dollars fighting wars and maintaining the most powerful military in the world... and one that has become the primary instrument of American geopolitical policy.  Now, this might be acceptable in a Clausewitzian world, but the current globalized world is far past the crude power politics of the late 19th and early 20th centuries (and for good reason too--power politics is what got us WWI and WW2, the two most destructive wars in human history).  But don't mistake the current reluctance of other power blocs such as the European Union, Japan, Russia/China, or India to avoid armed brinksmanship as cowardice.  These countries are enlightened to the fact that warlike tendencies in a globalized world create harms which far outweigh any possible benefits.

Current geopolitical forces don't favor violent application of national force anymore.  They favor economic development and by extension application of national force through multilateral entities (UN, NATO, SCO, etc.) and through economic means (like the G-20 bloc of developing countries and OECD/G-8 power blocs at the WTO).  As military force becomes more and more expensive to maintain and exercise, economic force (trade wars) become an increasingly attractive alternative to other nations.  But it's a pity that the Bush administration still doesn't seem to get it.  The United States currently runs a trade deficit of nearly 600 billion dollars and a fiscal deficit of 300 billion dollars.  Our national debt is nearly 7.9 trillion dollars, and our interest payments on that debt eat up nearly a quarter of the federal budget every year.  Earlier, I blogged about the economic weapon that China could use against the United States--the massive dumping of U.S. Treasury Notes.  This deficit and debt is true cause of that weapon.  The current situation of our United States economy and governmental balance sheet is that we rely on foreign countries and foreign governments to finance our debt by buying our securities--giving them leverage over our economy and government, as well as--through our debt payments and outflow of hard currency--the ability to buy the high-tech weapons to fight us (www.sinodefence.com).  Why do have this enormous debt?  Two reasons:
1) Our economy is unsustainable.  President Bush claimed in his recent State of the Union address that our GDP has grown at its fastest rate in nearly two decades.  What he didn't tell you is that most of this economic growth is built on increased consumer consumption, which is built on debt financing creating by rising housing prices.  Basically, the average American consumer is spending more not because they're earning more, but because they're borrowing more second and third mortgages to cover their rising debts.  Currently, as the housing bubble hasn't burst, American consumers can still continue this borrow and spend pattern, but as soon as housing prices stop rising (they don't have to drop... only stop rising) American consumers will be unable to continue to borrow against their assets and the economic growth of these past two years willl flatten.  By spending money overseas and not domestically in programs that encourage the creation of high-value jobs (such as spending money on college education to create more scientists and engineers) President Bush has forced Americans to begin eating their seed corn and go into further debt.  In fact, last month, the average American household had a savings rate of negative .6%... which means they spent 6-tenths-of-a-percent more than they earned.  Furthermore, this "deficit spending" doesn't benefit domestic investment because the vast majority of these purchases are on imports--basically meaning that Americans are pouring money into foreign nations, who are, through their purchases of housing mortgages and government bonds, simultaneously lending the money to spend again.
2) President Bush has created many unsustainable deficits directly tied to his military expenditures and tax cuts.  If his 2001 elimination of the capital-gains-tax and rollback of the upper-bracket-income-tax were eliminated, the U.S. deficit would be slashed in half (according to Bush's own White House Budget Office and economist Stephen D. Leavitt of the University of Chicago.)  But because Bush wants to benefit his "investing class" more than "working class" Americans, he's created a deficit which the sons and daughters of the "investors" won't have to pay off (as they are the only Americans which hold large numbers of government bonds)... but which the sons and daughters of the vast majority of Americans will have to shoulder.  Why spend so much money on defense?  Bush has been trying to pursue America's continued geopolitical dominance (www.pnac.org) with neoconservative principles without realizing that their ideas are more suited for the Clausewitzian world of Bismarckian Germany than the modern world of economic globalization. 

Continued American strength comes not from attacking other countries and waging war on guerrila partisans/terrorists halfway across the world.  It comes by maintaining our economic prowess and competitiveness--by spending money on making sure American students are well educated enough to continue being the most economically productive workers in the world... not by cutting Pell grants for bullets, bonds, and the rich.

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