The focus point of last week’s debate was foreign policy. But, as we all saw and expected, the status of the economy played a big role as well.
The connections between economics and foreign policy are numerous, but here are three key things that the next president (that’d be Obama) can do to the economy to affect foreign policy.
1) “Fiscal Responsibility”- how and how much we spend and levy taxes has a huge impact on foreign policy. Borrowing from foreign governments is partly how we finance our deficit. Obviously that reduces our leverage in global affairs. This is what Joe Biden meant when he said that taxes were “patriotic”.
We cannot be strong abroad unless we are strong at home. A weak economy means that foreign investors, including certain governments, will control more of our businesses and property.
We need an adequately funded government to expand the Foreign Service, aid organizations, as well as the Army and Marine Corps.
2) “Smart Regulation”- We all know that American securities markets will be more regulated, just like how new accounting rules came with Enron a few years ago. There is every reason to believe that securities regulations that corporate governance issues will be codified globally. Therefore, healthy relations with other countries will be essential for American companies to raise capital.
3) “Fair Trade/Development”- There is no end in sight to foreign trade, but trade deals must be enforced. Trade is essential for goodwill, domestic economic growth, for developing countries’ growth, and for a strong dollar.
