The systemic crisis now beginning to engulf the United States, Europe, and the global economy will bring drastic cuts in our defense spending. There is no other way to balance the federal budget without raising taxes. In this and the next four “On War” columns I will suggest means by which we can reduce defense outlays without endangering national security. Subsequent columns will look at each of the four armed services. Here, I want to lay out the assumptions that will shape our New Model Defense Department.

The first is that the maximum the country will be able to afford for national security will be $100 billion annually—about 10 percent of what we are spending now. That would still give the United States the world’s highest defense budget. The $100 billion figure is generous; our national finances may be so bad we have to spend less.

Second, our real defense requirements reflect our geography. In terms of threats from other states, we are an island. We face no hostile armies to our north or to our south, nor at present any threatening navies to our west or east—you may safely disregard the U.S. Navy’s game of puffing the Dragon. Though the nonstate, Fourth Generation danger from the south is real and growing, we should deal with it as a law-enforcement problem for as long as possible.

Third, our post-collapse foreign policy will be that recommended by Sen. Robert A. Taft. American armies will no longer be spreading “democracy” in the Hindu Kush, nor along the banks of the Euphrates. Our defense budget need only be adequate for defending our territory and citizens.

Fourth, consistent with a Taftian foreign policy, our grand strategy will be defensive. If other countries, cultures, and peoples leave us alone, we will leave them alone. If they attack us, we will wipe them off the planet and out of history.

Fifth, our armed services will be reoriented toward the threat posed by Fourth-Generation war, war waged by non-state entities. We will neither plan nor structure our forces for war with other states, although we will retain a residual capability for defensive state vs. state warfare, especially at sea and in our nuclear deterrent. We will avoid land and air war against other states as a matter of grand strategy. In such conflicts, the losing state is likely to disintegrate, creating yet another fertile field for Fourth Generation entities. That is a greater threat than any posed by another state.

Sixth, most of our current military units and weapons, which were designed for war against other state-armed forces, are useless or counterproductive in Fourth Generation war. Were they effective, we would have won in Iraq and Afghanistan in a matter of weeks, as we did against the former’s state-armed forces.

Seventh, we will fire virtually all military contractors, except those that actually build ships, tanks, aircraft, etc. Our troops will eat no more steak and lobster dinners courtesy of KBR; they will again run their own mess halls, maintain their own equipment, and do their own thinking. Nothing has damaged our military more than contracting out its thinking to retired senior officers, who created or perpetuated the problems we now hire them to solve.

Eighth, we will abolish almost all civil service positions in the Defense Department, except in the Pentagon itself. We might be wise to go further, abandon the Pentagon, and force the Defense Department to house itself in the Old Executive Office Building, which formerly had enough space for the State, War, and Navy Departments. Limiting space is one of the more effective ways to curb bureaucratic growth.

Ninth, all new equipment will be procured off-the-shelf, with competitors evaluated in rigorous fly-offs and shoot-offs designed to mimic combat conditions as closely as possible. At present, the services come up with “wish lists” for all the characteristics they want a new piece of equipment to have, then find someone to build it at enormous cost. Instead, they will buy new ships, tanks, and planes the way you and I buy cars, selecting from what is available. The competitions would be open to all the world; winners, if foreign, would have to build here under license.

If, as assumed here, we couple reducing the defense budget with genuine military reform, we can emerge from what will be a messy process with armed forces that are more effective and more useful than those we have now, at a small fraction of the cost. That is a fact, not an assumption. And as our systemic crisis builds and culminates, it will also be a necessity.