I wonder what they'd do if the US starts reducing NATO commitments. A perception that Europe is using financial blackmail to keep the US in NATO would have interesting effects on US politics.
Anyway, it's been clear to me that this sort of thing was Trump's plan all along. The goal is massive and permanent reduction in the size of the federal government. If that requires crashing the US ability to borrow more money, and crashing the value of the dollar, that's a price he's willing to make the US pay. US reputation abroad is of absolutely no importance to him; indeed, it's a negative, since a positive reputation allows borrowing that sustains the large federal government he hates.
The lesson for Europe is that depending on the US to defend them was a poisonous mistake, even if a very seductive one.
A post-crash US would be poorer, but also much more economically competitive. This would tend to encourage investment, so it's an interesting question how far the dollar would actually decline.
I wouldn't want to be in South Korea or Taiwan (or Japan, really) in this scenario.
Trump likes to frame is as if Europe said: "Please, USA, protect us, and we will just parasite on you and abuse our relationship to our advantage". Whereas in fact the whole story is the other way round. For example there were limits on the size of German army not that long time ago. And the USA did everything so that its interests are well represented n Europe. Now that Trump plays his "We don't need anyone" theme, the former allies of the USA are forming their own alliances, reduce spending in the USA and no longer feel obliged to turn a blind eye on things that were bothering them for decades.
The only reason why other countries sent their soldiers to stupid wars in Afghanistan and Irak that made no sense then and make no sense now was because they were honoring their commitments and saying OK, we send people to die but if the worst come and Russia attacks us, The USA will do their part. Now Trump openly says all this was for nothing. All trust in the USA is gone as nobody knows what Trump does when he wakes up next day. So we quietly work on making the best of the current situation.
I'm less interested in performative statements and more interested in underlying motivations and incentives. It's not a question of who is "right" but of what the actors get out of it.
Of course Europe was leaning on US defense. This enabled resources to be diverted to social spending instead, something that has become all the more vital as populations age. And it's not clear what the US gets out of defending Europe now. There's no perceived Soviet juggernaut and Russia can't even conquer Ukraine.
> There's no perceived Soviet juggernaut and Russia can't even conquer Ukraine.
It looks a bit like that to be the case, but legally Russia still isn't at war with the Ukraine, according to their own internal law. Hence the use of mercenaries and "volunteers" and the pinky promise that conscripts are not used near the Ukraine.
> Europe was leaning on US defense. This enabled resources to be diverted to social spending instead
While each of these statements seems true, there is an imprecise implication that the USA was sponsoring Europe's social security. There are several problems with this implication, starting from the fact that the USA wanted to be present in Europe and benefited from it. Sure, increasing military budgets means less money is available for other things, including social spending, but increasing it from 2% to 5% like they're doing now or even 9% doesn't mean that Europe stops offering free healthcare and education to its citizens. So while I understand why Trump is promoting this narrative, it is his typical lie.
> depending on the US to defend them was a poisonous mistake, even if a very seductive one.
It was a decision that was necessary to not loose the second world war to Germany and/or the Sovietunion. Until 30 years ago separating from the US would have meant allowing the Sovietunion to expand to the Atlantic. Separating from the US has been an open discussion for the last 30 years, but it was always felt to be a security risk and the US has actively used its soft power to remain the status quo.
Anyway, it's been clear to me that this sort of thing was Trump's plan all along. The goal is massive and permanent reduction in the size of the federal government. If that requires crashing the US ability to borrow more money, and crashing the value of the dollar, that's a price he's willing to make the US pay. US reputation abroad is of absolutely no importance to him; indeed, it's a negative, since a positive reputation allows borrowing that sustains the large federal government he hates.
The lesson for Europe is that depending on the US to defend them was a poisonous mistake, even if a very seductive one.
A post-crash US would be poorer, but also much more economically competitive. This would tend to encourage investment, so it's an interesting question how far the dollar would actually decline.
I wouldn't want to be in South Korea or Taiwan (or Japan, really) in this scenario.