The economic crisis is affecting national security as well because it evokes fears of "instability and high levels of violent extremism" as was seen in Europe in the 1920's and '30's.
That assessment comes from Director of National Intelligence Dennis Blair in the public portion of his testimony today to the House Intelligence Committee.
Blair says the longer the global economic downturn continues the more serious the threat to U.S. strategic interests.
"Roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown," Blair says.
He points to anti-state demonstrations in Europe and the former Soviet Union as evidence. And notes that much of Latin America, the former Soviet states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit.
"Statistical modeling shows that economic crises increase the risk of regime-threatening instability if they persist over a one to two year period," Blair says.
"Besides increased economic nationalism, the most likely political fallout for U.S. interests will involve allies and friends not being able to fully meet their defense and humanitarian obligations."
Blair envisions a potential flood of refugees from Caribbean countries to the United States.
He also sounds a cautionary tone about how lower oil prices - good news for consumers - puts additional pressures on Iran and Venezuela to engage in what the director calls "adventurism."
Blair's testimony also focuses on extremist groups that use terrorism. To no one's surprise, he identifies extremist Muslim groups as presenting the greatest capability to threaten the United States.
The good news, he says, is that these groups have been unsuccessful in meeting their goal of conducting another major attack in the United States. And he notes that mainstream Muslim opinion is turning against groups like al-Qaeda.
"Over the last year and a half, al-Qaeda has faced significant public criticism from prominent religious leaders and fellow extremists primarily regarding the use of brutal and indiscriminate tactics." Blair cites actions taken by al-Qaeda in Iraq, and elsewhere, that have claimed the lives of Islamic civilians for helping weaken support from Muslims.
But he also notes that al-Qaeda has been changing tactics, throwing more support toward the Taliban and moving the battleground to Afghanistan and Pakistan. The squeeze the U.S. and its allies have put on al-Qaeda in that region, he says, has made the terrorist organization "less capable and effective than it was a year ago."
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