as it has in the case of other empires, as explained in Paul Kennedy’s book The Rise and Fall of the Great Powers.
The NSC-68 worldview would cause the United States to be less competitive with countries that didn’t spend so much on defense. It would lead to a dollar crisis that would eventually result, in the early 1970s, in Richard Nixon’s breaking the last link of the dollar to gold.
That meant that American governments were free to inflate, or debase, the currency as much as they wanted. Most did. That’s because it was expensive to pay for the permanent warfare state of NSC-68 as well as for a huge welfare state.
But there were objectors to NSC-68. Even some of the important American policymakers, some who had helped formulate the containment idea, believed NSC-68 was flawed, as we will see in our next segment.
This article originally appeared in the November 2011 edition of Freedom Daily. Subscribe to the print or email version of The Future of Freedom Foundation’s monthly journal, Future of Freedom (previously called Freedom Daily).