Romney's Interventionalist Foreign Policy Could Get Expensive

Agenda-Setting Financial Insight.
Oct. 9 2012 4:50 PM

Romney's Interventionalist Foreign Policy Could Get Expensive

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The Iraq and Afghanistan wars have so far cost around $1.4 trillion, according to the National Priorities Project.

Photo by MUNIR UZ ZAMAN/AFP/GettyImages

Mitt Romney’s foreign policy doesn’t match his thrifty approach to other spending. The U.S. Republican presidential candidate’s speech on Monday suggests a George W. Bush-like interventionist streak, another step away from the party’s pre-World War Two isolationism. That could lead to more Middle East conflict and defense spending. It’s also just as risky as President Barack Obama’s stance.

Before 1939, GOP foreign policy was insular, partly on cost grounds and partly following President George Washington’s admonition to “have as little political connection (with foreign nations) as possible.” After 1945, there was bipartisan agreement on a more activist foreign policy. Romney recalled that period, claiming that the current Middle East situation “would be familiar to George Marshall.”

With the Cold War dwindling in significance after the fragmentation of the Soviet Union, George W. Bush ran for election in 2000 promising a “modest” foreign policy. But following the attacks on Sept. 11, 2001, he reversed course and sent the military into Iraq and Afghanistan. Romney appears to support the Bush approach. He claimed there is a “longing” in the Middle East for American leadership and promised complete alignment with Israel, stronger support for Syria’s opposition and tighter sanctions on Iran.

Interventionist policies are, however, expensive. The Iraq and Afghanistan wars have so far cost around $1.4 trillion, according to the National Priorities Project. That’s only 14 percent of the $10 trillion increase in U.S. debt since 2001, but towards the high end of politically feasible spending cuts over the next decade. In addition, Romney wants to increase defense expenditures, putting more pressure on other areas if, as he says, he wants to cut America’s deficit and debt.

It’s also far from obvious that Romney’s policies would improve U.S. security. As the last decade has shown, Uncle Sam can deter major attacks, but may not be strong enough to prevent them altogether. Conversely, increasing U.S. activity in the Middle East - for instance drone attacks - risks alienating those affected, as seems to be happening in Pakistan. That in turn could destabilize existing regimes that, while unpleasant, are often replaced by worse ones or chaos.

Romney’s desire for a bigger role for the U.S. government in other nations’ affairs could easily negate the benefits of his relatively austere, small-government policies at home.

Read more at Reuters Breakingviews.

Martin Hutchinson covers emerging markets and economic policy, drawing on 25 years of experience as an international merchant banker. He ran derivatives platforms for two European banks, before serving as director of a Spanish venture capital company, advisor to the Korean conglomerate Sunkyong and chairman of a U.S. modular building company