Wiil American debt lead to war?

On February 11, the 31st anniversary of the Revolution, Iran announced that it had become a nuclear state. Iran has refined uranium well below the 90% purity that is needed for nuclear weapons but many scientists acknowledge that 90% uranium may be only months away due to the great number of centrifuges that Iran possesses. For many years our Intelligence agencies have been warning that Iran was pursuing a nuclear capability and now it seems their warnings have come to fruition.

Iranian President Mahmoud Ahmedinejad has stated publicly and repeatedly his desire to “wipe Israel from the face of the earth”. In 1981 Israel bombed and destroyed the nuclear reactor under construction in Baghdad, Iraq. The result of this bombing mission was Saddam Hussein was never able to develop nuclear weapons. In 2007 Israel repeated their attack but this time the target was a reactor in the nation of Syria (1). The world must understand Israel will act independently if they believe they are at risk.

After a wasted year trying to negotiate with Ahmedinejad, President Obama and Defense Secretary Robert Gates are now calling for immediate sanctions against Iran. Many experts believe sanctions are not possible because China and Russia have close economic ties with Iran and are members of the U.N. Security council which gives them veto power over all resolutions.

Russia has signed an agricultural and telecommunications agreement with Iran and there is $3.7 billion in trade conducted annually between the two countries. China has become Iran’s largest trading partner and relies on Iran for 11% of its energy needs. Trade between the two countries is now valued at over $36 billion annually (2). Both the Chinese and Russian governments have indicated they will not support sanctions against Iran.

In the United States the Medicare program began paying more in benefits than it collected in tax revenue in 2008 while Social Security will begin to do the same in 2016 (3). Deficits in these two programs will have to be covered by drawing money from the general fund of the United States Treasury. Most of this money will be borrowed from China in the form of Treasury note sales.

Currently the United States is carrying $12.3 trillion in debt (4) and Congress has just voted to increase the national debt ceiling by $1.9 trillion to $14.3 trillion. China and Russia hold a combined $918 billion (about 25%) of the $3.6 trillion the United States owes to foreign countries (5).

On February 10, the day before Iran’s nuclear announcement, the Chinese military threatened to dump its U.S. bonds on the open market (6). This would drive interest rates so high it would disrupt our already ailing economy. It is a fact that China’s position on this issue must be considered before any action is taken against Iran.

If Israel acts militarily against Iran our President will have a difficult choice to make. Will he defend Israel in a war that would surely follow an attack and risk having China destroy our economy or will he forsake Israel to delay the inevitable day of reckoning with our creditors? Israel may already know the answer to that question; one of their ministers, Limor Livnat, was reported to have remarked “Israel has fallen into the hands of a terrible American administration” (7).

Carl D. Goodson
www.carldgoodson.com
Clute, TX
(1) www.economist.com/world/middleast-africa/displayStory.cfm?story_id=15213442
(2) www.upi.com/Science_News/Resource-Wars/2010/02/09/China-passes-EU-in-trade-with-Iran/UPI-55541265737793
(3) www.socialsecurity.gov/OACT/TRSUM/index.html
(4) www.usdebtclock.org/
(5) www.ustreas.gov/tic/mfh.txt
(6) www.washingtontimes.com/news/2010/feb/10/chinese-see-us-debt-as-weapon/
(7) www.economist.com/world/middleast-africa/displayStory.cfm?story_id=15213442