The U.S. debt debacle may signal the end of the American century not only economically, but also militarily and diplomatically. A minor exchange hinted at the shape of things to come. On a visit to Afghanistan, Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, was asked by troops if they would get paid if the U.S. defaulted. “I really don't know the answer to the question,” came the reply.

There, in a nutshell, is the new geopolitical reality confronting the U.S. It can no longer afford to be the world's policeman. A large slice of the $2.4 trillion cuts package will come out of the defense budget. President Barack Obama is already approaching foreign entanglements more as an accountant than a warrior. Few doubt that if the Americans had been fully engaged in the Libya campaign, Moammar Gadhafi would be long gone. The planned withdrawal from Afghanistan is driven as much by financial considerations as military and political ones. A former Pentagon official has calculated that it is costing $20 billion a year simply to supply air-conditioning to U.S. forces in Afghanistan and Iraq. Such a swaggering, money-no-object approach to military deployments has been a feature of the U.S. in combat since WWII. No more, it would seem.

But it is not only the U.S. that is being forced to rethink its international posture because of economic circumstance. The Members of Parliament warn that the Coalition's Strategic Defence and Security Review has not only left the military incapable of conducting the Afghan and Libyan missions effectively but has left the country without a full capability to defend itself, in the process reducing its standing in the world.

These are troubling developments. The West's addiction to debt is proving even costlier than we feared.