(2) "Could Overseas Financing Hurt the U.S.?" by Greg Ip. Wall Street Journal, 26 April, p. A2.

Basic theme of PNM book is that US conducts a series of grand transactions with rest of world in terms of what we offer and what we expect in return. One thing we offer world through our willingness to overspend on our budget is a military that can export security to the world. How do we pay for this? We don't on many levels. That sovereign debt is purchased by other nations that prefer to "import" that service from us.

Good article raises the new bugaboo for those smart observers who are catching on to this reality. We are world's biggest debtor, so someone is paying for all that defense buildup after 9/11, plus the two wars, plus the Iraq occupation. That someone is first and foremost China and Japan. Together they now hold roughly a trillion dollars of U.S. Treasury bonds. What they do with those bonds can have huge impact on the U.S. economy, and thus our continued ability to fund defense.

So if you think we're just spending on defense for ourselves, you're wrong. Someone else is buying this service as well, so if we pretend to wage war solely within the context of war and ignore the everything elseólike who pays for itówe're just kidding ourselves about our "unilateralism." China and Japan better continue to approve of the security exports we offer the world, because when they stop approving of that service, we will be hard pressed to continue offering it and the world will suffer.

This is why I say the Core is in this Global War On Terror together or not at all. That's why how we explain ourselves in this GWOT is crucialóno happy ending revealed means no one willing to fund the war.