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Last month, I speculated that the U.S. government hasn’t responded devastatingly to hacking by China and North Korea (at least according to official charges) because it lacks escalation dominance in cyber-security. In other words, Washington is afraid to hit back hard at the hackers because it fears the hackers can hit America back harder still.

Now for the really bad news: I was right. And we know this from no less than General Martin Dempsey, Chairman of the Joint Chiefs of Staff.

Dempsey, the nation’s top uniformed military leader, told Fox News on Sunday that “In every domain…we generally enjoy a significant military advantage. We have peer competitors in cyber….We don’t have an advantage. It’s a level playing field, and that makes this Chairman very uncomfortable.”

Indeed, in a crucial sense, lack of U.S. escalation dominance in cyber-war is worse for Americans than the erosion of nuclear escalation dominance in East Asia about which I’ve also warned. The latter, after all, will mainly affect the security of American allies – because it could weaken Washington’s willingness to threaten nuclear weapons use in order to protect them. The United States’ ability to deter a nuclear attack on its own homeland still looks dependable – both because America’s own nuclear forces remain so formidable compared to any adversary’s, and because the use of nuclear weapons in a way that’s mutually non-catastrophic for attacking and retaliating country alike is so implausible, given the immense destructiveness of even one such device.

But escalation dominance in the cyber theater is vital for protecting major U.S. institutional targets, not allies. And since cyber-attacks can be calibrated much more easily, tit-for-tat exchanges are easily imagined.

As a result, cyber-security is unmistakably one area in which the United States has become steadily more vulnerable in recent years, and nothing said by Chairman Dempsey indicates that the situation will improve much any time soon. It’s clear, then, that much more work needs to be done on defenses and on offensive capabilties. But it’s equally clear that Washington needs to work much harder on strategies of denial, as loosey-goosey American corporate transfers of advanced technology all around the world have undoubtedly strengthened and in some cases created the cyber threats the nation now faces.