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Military Strategy

Fiscal Reality and the American Way of War

The Pentagon's war fighting structure needs open heart surgery not cosmetic reform.

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Douglas Macgregor
Apr 17, 2026
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Note: This post was published in 2012 for Infinity Journal.

How and when America’s ongoing budgetary crisis will be resolved after Americans elect a President in November 2012 is a mystery, but trillion-dollar deficits stretch as far as the eye can see and the Federal Debt is now 100% of U.S. gross domestic product.[i] When interest rates on the U.S. Treasury’s securities rise – and they will – the U.S. Government’s cost of servicing the nation’s ballooning debt will soar,[ii] confronting Americans with a new, more profound fiscal crisis: in Senator Tom Coburn’s words, “the specter of default.”[iii]

Mitt Romney’s grandiose plans for a 450-ship navy, along with Rick Santorum’s determination to wage war on Iran (or anyone else for that matter) will vanish like smoke in the wind after January 2013 when the next financial crisis strikes.[iv] America’s domestic social and economic problems will become so severe that the world will have to tend to itself for a decade while Americans sort themselves out. Regarding “ends, ways, and means”, what does all of this tell us about US fiscal realities and the American way of war?

Withdrawal from imperial garrisons is inevitable, resulting in a reduced overseas footprint, and laser-like focus on rebuilding prosperity at home.

Frankly, the U.S. will be fortunate to maintain a defense budget of 250 to 300 billion dollars. Economic power is the foundation for American military power and it must be restored. Withdrawal from most of the United States’ overseas garrisons is inevitable, resulting in a reduced overseas footprint, and laser-like focus on rebuilding prosperity at home. This is not a new response to changed strategic conditions.

In the aftermath of World War II, George Kennan’s strategic concept of containment took these realities into consideration too. But it would be a mistake to assume a carefully crafted national military strategy is at work inside the White House, the Pentagon or Congress.

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