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Bloomberg publishes an article by the famous historian Neil Ferguson “Any great power that spends more on interest payments on its debts than on defense will very soon cease to be great,” writes Ferguson. He notes that, unlike the first Cold War and the war on terror, the United States does not want to send its soldiers anywhere, limiting itself to the supply of weapons and money.
I hate to spoil the “fun” for our conservative historian here, but the British Sterling was on gold standard, which means that its persistent war deficits had to be financed through constant borrowing.
The post-1971 US dollar is a fiat currency and its “borrowing” is largely cosmetic in the sense that functionally the US treasury bonds are just a reserve drain to absorb the excess dollars the US have spent overseas. Its “borrowing” has no bearing on how the US can print unlimited amount of dollars to get “free lunch” all over the world.
This is why it’s called Super Imperalism, which is the title of the Michael Hudson’s book that everyone should read if they want to understand how US imperialism actually works (the State Department literally bought 2000 copies to teach themselves how to do imperialism in 1970s and I find it funny that so few anti-imperialist leftists even bothered to read the manual that taught the empire how to do imperialism).
And as long as the world depends on the dollar and the US to import oil and grain, there will always be countries willing to die for the US. The EU is a prime example of this.
Plus one for Michael Hudson.
They have done an incredible job of keeping him off TV and out of the press, but if you want someone to explain neoliberalism and then take it down using the language of neoliberal economics, he is your man.
Hey thanks for the book recommendation, i hadn’t heard of it. Commenting so i can find it easily
And the US becoming a petrostate is hurting this massively. It’s why even the Saudis are now looking to do transactions in local currencies. I’m not sure where all this is headed, but USA weird and sudden shift to independent energy is damaging relationships more than Russia ever could.