America Is in Big Trouble

What creates wealth is the real economy like agriculture, manufacturing, mining, energy and construction. The trade, professional service and financial sectors only provide assistance in exchange for a piece of the pie. They do not generate wealth by themselves. (See Mammonism.)

Today's American economy is too service-oriented and financialized. Except for a few remaining high-tech and military industries, most of the manufacturing has moved to countries with low production costs. The US economy has undergone severe deindustrialization over the past few decades and has become increasingly dominated by financial capitalism that relies on financial operations to reap the wealth of the world, while its productivity has long been unable to support its hegemony. Our apparent strength is built on virtual finance rather than real economy. The Federal Reserve prints a huge amount of money each year. Our national debt has exceeded $32 trillion. Private lending reached another $30 trillion. Much of this money flows abroad through purchases of foreign goods, loans to other countries, and payments to our debt creditors, as the US dollar as the world reserve currency is demanded by all countries. It is estimated that there are more than $80 trillion dollars in circulation abroad.

This allows the US not only to harvest the wealth of the world with printed dollars, but also to influence other economies with its monetary policy, such as using monetary easing (reducing interest rate and increasing dollar supply) to stimulate borrowing, and monetary tightening (increasing interest rate and reducing dollar supply) to make the dollar appreciate relative to other currencies, causing the repatriation of capital to the US and the contraction of other economies, enabling US financial oligarchs to acquire foreign assets and stocks at a discount price. Monetary policy is often operated in conjunction with other measures, such as creating regional tensions, social unrests and color revolutions under the pretext of human rights etc. to worsen the investment climate in other countries so that the US can reap their wealth while profit from arms sales and wars. Of course, the direct beneficiaries are the US special interests, not the American people.

The current world economic order established by US special interests is unfair and immoral from the standpoint of developing countries. To maintain this order, the US special interests have made unremitting efforts to stifle the growth of rival economies, such as UK, Germany, USSR and Japan in the past, and Russia, Europe and China today. They have instigated the Russia-Ukraine conflict to contain Russia while creating a security crisis for Europe, cut off cheap Russian energy supply to the continent, seized the European market with expensive American energy, which sparked severe inflation that affected people's lives, a dramatic increase in the cost of production that damaged the European economy, and a significant capital outflow from the region, further eroded Europe's strategic autonomy, tied Europe to the American chariot against the rising East, and made Europe more dependent on the US for security. They are currently creating tension in the Taiwan Strait and the South China Sea to contain China.

America's determination to maintain its global hegemony contradicts the aspirations of other nations to develop their own economies. Most countries desire a cooperative, equitable, and peaceful environment for development that benefits all parties. The US policy of prioritizing America's interests, promoting unipolar hegemony, and asserting extraterritorial jurisdiction has encountered opposition from developing countries worldwide.

Faced with mounting debt, inflation and financial crises that a hollowed-out economy must face, US policymakers are caught in growing anxiety. But, instead of focusing on solving deep-seated structural and institutional problems within the United States itself, they resorted to high-handed tactics to pass on the crises, including continuously raising the debt ceiling, forcing other countries to buy more and more US treasuries with no intention of repaying the debt, flexing military muscles, provoking regional conflicts, launching cognitive, trade, technological, and financial wars, using US domestic law to exercise long-arm jurisdiction over other countries, imposing unilateral sanctions to suppress foreign companies, freezing and confiscating foreign overseas assets, weaponizing the US dollar and the SWIFT system, sabotaging civilian infrastructures of other countries, and engaging in embargo, decoupling, clique and isolation, etc. These tactics aimed at containing other economies also caused serious damage to our own, ruined America's reputation as a fair player, weakened its international influence, damaged the credibility of the dollar, further isolated America itself, and is causing a global sell-off of US treasuries and de-dollarization that will ultimately end US hegemony. To make matters worse, uncontrollable inflation in the US has forced the Federal Reserve to raise interest rates aggressively, triggering the current wave of bank failures and a global economic downturn, causing turmoil in the financial markets of many countries, especially heavily indebted countries.

For its own self-interest, the United States has become a source of instability in the world. Of course, its vested interests will not stop being the troublemaker. Some of them think that they can harvest others's wealth forever just by keeping the money printing presses running. Others are willing to start another world war to maintain their hegemony. On the surface, it is the overcapitalization and overfinancialization that have led to America's crises, but the root of the problem lies in the ideologies that the American plutocrats believe, that is, capitalism, Darwinism, Machiavellianism, the law of the jungle, and zero-sum game. (See Darwinism and Eastern Philosophies.) It's just that they forget that a hegemony built on mounting debt rather than real ecomony is not sustainable. Most tango dancers do not embrace the ideologies of the American plutocrats, I believe, because these ideologies contradict the spirit of tango, but we cannot but be wary of the negative influence of these ideologies on our life and tango.

The world that the majority of nations seek is a democratic world where all countries have the same opportunity to develop their economies and advance the lives of their people through win-win cooperation. US policy makers must abandon their selfish, bullying and myopic approach if they truly believe in democracy. The American electorate deserves leaders who demonstrate greater moral principles. Otherwise, America will ultimately face the repercussions of its behaviors. (See The Vicious Circle of Regime Change.)

P.S.
The following video explains the American monetary system, from Bretton Woods agreement, decoupling of USD to gold, USD pegging to oil, consumer capitalism, vendor financing, outsourcing manufacturing, job losses, big trade deficits, huge inequality, big military, lots of wars, printing more and more money and having more and more debt, to devaluation of USD and inflation. The speaker attributes this doomed system to dollar as the world reserve currency and suggests that these will all end when a new currency regime emerges. The question is whether vested interests in the US will allow that to happen before the empire collapses?