WASHINGTON — The nation's new intelligence chief warned Thursday that the global economic crisis is the most serious security peril facing the United States, threatening to topple governments, trigger waves of refugees and undermine the ability of America's allies to help in Afghanistan and elsewhere.
The economic collapse "already looms as the most serious one in decades, if not in centuries," said Dennis C. Blair, director of national intelligence, in his first appearance before Congress as the top intelligence official in the Obama administration.
Blair's focus on the economic meltdown represents a sharp contrast from the testimony of his predecessors in recent years, who devoted most of their attention in the annual threat assessment hearing to the issues of terrorism and the wars in Afghanistan and Iraq.
Blair's conclusions are likely to bolster President Obama's case for swift action on a nearly $800-billion stimulus package nearing final approval in Congress.
"Time is probably our greatest threat," Blair said. "The longer it takes for the recovery to begin, the greater the likelihood of serious damage to U.S. strategic interests."
He said that one-quarter of the world's nations had already experienced low-level instability attributed to the economic downturn, including shifts in power. He cited anti-government demonstrations in Europe and Russia, and he warned that much of Latin America and the former Soviet satellite states lacked sufficient cash to cope with the spreading crisis.
"The most likely potential fallout for U.S. interests will involve allies and friends not being able to fully meet their defense and humanitarian obligations," Blair said. "Potential refugee flows from the Caribbean could also impact homeland security."
The decline in oil prices in recent months might benefit consumers in the short term and "put the squeeze on the adventurism of producers like Iran and Venezuela," Blair said, but he warned that prolonged price drops could result in a supply crunch if they lead to cuts or delays in investment in oil development and infrastructure.
Economic crises in recent decades have tended to be confined to specific regions -- such as the Asian financial meltdown of the 1990s -- meaning affected countries could rebuild by focusing on exporting more of their goods.
But "countries will not be able to export their way out of this one because of the global nature" of the crisis, Blair said.
