War May Strengthen U.S.’ Resolve on Economic Front

This is “not a time to gloat,” President Bush said in telling the nation that the war was over, “but it is a time of pride--pride in our troops, pride in our friends who stood with us during the crisis.”

He might have added a time of determination too. For Americans must now turn to economic challenges at home--the recession and, beyond it, the threat of slow economic growth and a battle for standards of living that used to be a birthright.

It will help that they face those challenges with a new confidence, and opportunities, born of success in the Gulf War. Indeed, the war’s aftermath could be the key to the economic future, bringing new business directly in the Middle East and indirectly in a renewal of America’s can-do spirit.

The confidence is not misplaced. In recent years there has been a lot of hand-wringing about declining U.S. power and influence. But the war has served as a corrective, a reminder of America’s world leadership--in the military, political, cultural, even the economic sense.

Militarily, the simple dedication of American young people on the line for the rule of law was as impressive as their technical skill.

Politically, only the United States could have put together a United Nations coalition to fight despotic aggression.

Culturally, the bastion of democracy showed that it retains the political will to defend a world that it has kept free for half a century.

Economically, however, there have been questions. Critics have accused the United States of pursuing imperial ambitions on a pauper’s pocketbook. Paul Kennedy, author of the popular 1987 book “The Rise and Fall of the Great Powers,” compared U.S. fighting in the Gulf to the monarchs of 16th Century Spain, who fought wars abroad but couldn’t finance them at home. Madrid in those days borrowed heavily and weakened itself paying interest, just as Washington today borrows to finance a growing deficit and now has an interest bill of close to $200 billion a year.

The mission to free Kuwait was criticized loudly because U.S. officials went “hat in hand” to Japan, Germany and other countries to raise money, financing that even now is given with extreme reluctance. Demeaning evidence of a fading superpower, said the critics.

But the criticism missed a point. It was not weak of the United States to request assistance; U.S. forces were going to the Gulf whether financial support was given or not. But the reluctance of nations considered U.S. allies was weak and dishonorable, an evasion of responsibility.

For U.S. taxpayers and military forces paid for the New World Order long ago, paid for it not only in the $1-trillion defense budget of the 1980s but in all the trillions spent in the past 46 years to shelter allies and keep peace in the world.

Western Europe and Asia were encouraged to go forth and prosper, their defense paid for, their shores and skies protected.

For the United States, it was not an act of charity but of leadership. As leader of the Western world, the United States benefited from a stable environment for growing trade and investment. Under U.S. protection, global output of goods and services grew faster since World War II than at any time in history. Germany and Japan were two of the era’s principal beneficiaries.

But benefits and benefactor were forgotten when the United States asked for help in the Gulf. Germany and Japan were fast to object and slow to pay--indeed, have yet to pay in full. The response was disgraceful. In Japan one political party tried to stipulate that money would not go to U.S. armed forces; in Germany workers refused to make parts for British fighter planes.

Now there is anger in Congress and among U.S. consumers, who may cool their affection for Japanese and German products. But there’s no need to be vindictive. Whatever flaw in Japanese and German political systems led them to dishonor their responsibilities is their problem to deal with.

The United States has whole new markets opening up for its commerce, new vistas for its leadership. The rebuilding of the war-torn Middle East, where U.S. industry will be first in line, is more than a casual construction job. Rebuilding Kuwait alone will take $50 billion--roughly 1% of the U.S. economy’s annual output--with perhaps $20 billion spent this year.

There may well be an opening to Iran and its enormous potential market of 70 million people and development of Egypt, with 54 million.

In Europe, U.S. positions on trade will get a warmer reception. Before the war it was feared that a united Europe would keep out U.S. exports. Now nobody will tell U.S. trade negotiators to go peddle their papers. Also, European unity itself has been set back by divisions between Germany and America’s Gulf War allies Britain and France.

The point is that the United States’ newly affirmed global leadership will buttress its economic standing. The success of U.S. high-technology weapons will become a selling point for all U.S. products on world markets, says a U.S. company chairman.

To be sure, the end of the Gulf War may not bring unprecedented prosperity, as did the aftermath of World War II. There are no automatic victories in today’s competitive marketplace; U.S. business will have to win on its own. Also, the U.S. economy has been weak and may only be capable of moderate, 2% annual growth coming out of recession, economists say.

But if American business can duplicate the determination of the troops and the seriousness of purpose of Gens. Colin L. Powell and H. Norman Schwarzkopf, the forecasts may underestimate the economy--just as most experts underestimated the swift conclusion of the war.

Not only a “time for pride,” this is a time to go forward, for a nation that knows once again what it can do.