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Political Bookworm
Posted at 03:32 PM ET, 07/19/2011

In new book, Mitch Daniels warns of a China-provoked disaster for the United States


Indiana Governor Mitch Daniels (AP Photo/AJ Mast)
Yesterday, Indiana’s Republican governor Mitch Daniels signed several trade deals between Indiana and a Chinese province. Those deals totaled $364 million and the governor’s office said the economic tries would spur job creation in Indiana and China.

“Over the past three years, our long-term relationship with China has deepened in meaning,” Daniels said. “Perhaps most exciting has been the quick growth in business and commerce and of the tremendous understanding between our two nations.”

That’s a markedly different tone from the one Daniels takes in his forthcoming book, “Keeping the Republic,” where China is portrayed more as a threat than an economic partner.

“China,” Daniels writes, “has already shown on multiple fronts that American views are of no particular interest to it.”

In a chapter titled “The Red Menace” — referring to both the Cold War and the red ink of the national debt — Daniels describes a scenario with China that he says could be “out of a horror movie.”

It begins, according to Daniels, with China declaring that it will no longer lend money to the United States and will pull out of the Treasury market. The value of the dollar plummets; markets go into a free fall. Other nations sell off U.S. Treasuries. Frightened Americans see their investments rapidly decline and pull their money out of the banks. Then, as “shipments slow or stop, shortages of consumer goods, including food in some locales, begin to be reported.” Panic ensues. Congress declares China’s decision an “act of war” and members begin calling for military retaliation. China attacks Taiwan. Finally, five days after his scenario begins, state governors begin to “declare martial law and deploy National Guard units to protect government buildings and retail districts against looters and angry protesters.” It’s a fictional nightmare that Daniel sees as a very real possibility.

Later on, he again evokes the spectre of war with China.

“We are now borrowing the entire defense budget (we’ve been spending about $700 billion a year on defense while running a deficit of about $1.4 trillion), much of it from the very countries, most notably China, against whom our forces might one day have to be deployed,” he writes.

“Keeping the Republic” will be published in September by Sentinel.

By  |  03:32 PM ET, 07/19/2011

 
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