Crisis-hit America must end its military dreams

As Mr Micawber said: 'Annual income twenty pounds, annual expenditure nineteen, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds, nought and six, result misery.' If you can get past the Dickensian counting, then there is a message for the US today. It no longer has the financial wherewithal to do what it wants to do.

If Barack Obama wins the presidential election, he has pledged to bring in a major reform of the health services and cut the tax rate for the middle and working classes. He wants to expand the war in Afghanistan. If John McCain wins, he wants to keep in place the tax breaks for the rich, fight to 'victory' in Iraq, expand the war in Afghanistan and challenge Iran in such an assertive way that it could well lead to another war.

There is no chance that either candidate, after this financial disaster and the mammoth US commitment to federal expenditure, can square the circle on future financial outlays.

What has to go? There cannot be a strong America abroad without a strong America at home. At the moment, many Americans are deeply pessimistic about their future. Senator Obama is right to insist he cannot break his promises for universal health care and tax cuts if the spirits and well-being of the country are going to revive.

Senator McCain's arithmetic of confrontation does not add up; it would lead America into more expensive entanglements.

Senator Obama's arithmetic is more complicated. If he can get US troops quickly out of Iraq then, theoretically, he would have soldiers and money from that budget to expand the war in Afghanistan. If he lowers the tone of confrontation with Iran and concentrates on negotiation, then he can avoid an expensive clash there.

But pulling the nuclear teeth in North Korea is going to cost much more, especially if the six-party talks advance to the point that America has to pay for the North's energy needs until the promised free reactor can be completed.

Senator Obama will want to continue President George W. Bush's aid increases to Africa. He will want to pay off America's debt to the UN. He will want to expand worldwide efforts to eradicate malaria and expand the education of poor girls.

All this raises the question: how can America afford an ever expanding defence budget? How can America invest so much in its anti-ballistic missile programme that many experts consider both unworkable and provocative?

It cannot all be done. Much will have to go, starting with the US presence in Iraq. The US military budget must be slashed.

Afghanistan is a tricky one, partly because Senator Obama seems so committed to more war and partly because Americans still feel that slaughtering al-Qaeda in its lair is an important priority. But this war is a ship to nowhere. America and Nato will go the way of the Russians, the British and Alexander before them.

This crisis forces the presidential candidates to think hard again.

Jonathan Power is a London-based journalist