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Secretary of Defense Robert Gates defines “balance” as the critical principle of his defense strategy. This emphasizes achieving a balance between current conflicts and dangerous and more conventional wars in the future. But finding the right balance between types of war is only one form of balance. We also need to balance the nation’s checkbook, and define the balance between what we spend on defense and what we can afford for the long term. Balance is not enough, our defense investments must be sustainable. Defense spending today, in inflation adjusted dollars, is at an all time high and exceeds Cold War levels. This has helped sustain the world’s finest military, but the funding for this buildup and two wars has been borrowed from foreign sources. The accumulated debt and subsequent interest payments have reduced our ability to weather the current economic crisis and will drag on our economic recovery for years to come. The Obama administration must craft a grand strategy to get us out of the red—strategically and fiscally. This essay offers a set of strategy, structure and investment shifts to that end.