As a catastrophist I spend time thinking about what might go wrong. Well, if we get into a war we will be tempted to spend more on guns than butter and the people at home will suffer. Well, if we spend more on both, then we will ruin our economy. We will become so indebted no one will lend to us, and we won’t be able to pay our bills. Well, if we don’t make anything that people want to buy, then eventually we’ll run out of money in the bank, and we’ll have to go begging. Etc, etc, etc.
Chris Hedges is a catastrophist, too. He has some evidence, though, that the bad shit that he sees possibly happening is actually happening. There will be a meeting. At the meeting there will be people, not our friends, who have been accepting our dollars in exchange for their own goods. Hedges tells us the people at this meeting believe that our money isn’t any good anymore. We don’t make anything ourselves that anyone wants to buy. The only thing that backs up the dollar any more is our promise that we’ll be able to pay them back. …tap…tap, tap, tap …Well, they don’t see us getting our act together, so they are planning to somehow stop taking all these dollars that aren’t worth anything.
The problem for them is that if in time the dollar is worth a great deal less, then their exchange of goods for dollars will not have made them anything. So, they want to be careful not to make the load of dollars they all have now worthless before they would be able to get rid of it all. But, they want to get to a position where they are no longer burdened by this situation. They want to be done with us.
The problem for us is that, well, our elites have sucked pretty much all they can out of the economy. They want to leave us holding the bag, so to speak. But, they can’t do this without making it obvious that they have done so as a criminal enterprise. They have to somehow keep the rest of the world lending money to us so that we can buy their stuff. It’s only in this way that they can continue to suck the profits out of the system right up until they pull their fangs out of our necks and walk away.
Well, maybe that’s too dramatic. However, there is no reason to think that people who would mold the country into such a basket case would afterwards want to stick around and watch us complain about our suffering. They have better more international commitments, I’m sure.
The American Empire Is Bankrupt
By Chris Hedges
This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.
Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.
There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.”
It is the first formal step by our major trading partners to replace the dollar as the world’s reserve currency. If they succeed, the dollar will dramatically plummet in value, the cost of imports, including oil, will skyrocket, interest rates will climb and jobs will hemorrhage at a rate that will make the last few months look like boom times. State and federal services will be reduced or shut down for lack of funds. The United States will begin to resemble the Weimar Republic or Zimbabwe. Obama, endowed by many with the qualities of a savior, will suddenly look pitiful, inept and weak. And the rage that has kindled a handful of shootings and hate crimes in the past few weeks will engulf vast segments of a disenfranchised and bewildered working and middle class. The people of this class will demand vengeance, radical change, order and moral renewal, which an array of proto-fascists, from the Christian right to the goons who disseminate hate talk on Fox News, will assure the country they will impose….
The article ends on the following note,
…The desperate effort to borrow our way out of financial collapse has promoted a level of state intervention unseen since World War II. It has also led us into uncharted territory.
“We have in effect had to declare war to get us out of the hole created by our economic system,” Lanchester wrote in the London Review of Books. “There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism ... there is no such model. It isn’t supposed to work like this, and there is no road-map for what’s happened.”
The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.
http://www.truthdig.com/report/page2/20090614_
the_american_empire_is_bankrupt/#246447
Commenting on this piece, I thought this apt,
By Folktruther, June 15 at 11:29 am #
We should understand that this is a historical fall of imperialism that has occurred many times in the past to former imperialisms. A large book by the Yale historian Paul Kennedy THE RISE AND FALL OF THE GREAT POWERS, essentially predicted this fall in 1985.
Great world power is based on economic wealth, especially industrial production, which is necessary to support a military. But if you put too much money into a current military, as the US has done, it decreases future investment in the economy, allowing other countries to out strip you. In this case, notably, China. In the last stage of imperialism, the imperialist economy becomes militarily top heavy, focusing entirely on the present rather than the future.
The reason is that the US has inherited military commitments made when it was economically in a relatively better position, ending WW2 with half the world’s industrial production. As its world production has declined, the military burden becomes increasingly heavy. And it has been drastically and stupidly increased even more by the Bushite military adventures. Incredibly, this did not allow for the occupation of Iraq after the invasion, Rumsfield assuming this wasn’t necessary.
Obama has been chosen to refurbish Bushite policy with his soaring rhetoric. Incredibly, he has expanded the Bushite wars, which now include Iraq, Iran, Afghanistan and Pakistan, i.e. the Irafpak war. Borrowing unsustainable amounts of money to do so. The obvious solution is to lessen the military burden, but this is dangerous from a domestic view. The withdrawal of the Soviets from Afghanistan was followed by a revolution.
I don’t know what is going to happen now, except that China is replacing the US as the leading power. It is allied with Russia increasingly in some ways not dissimilar to the way the US is allied with Canada. And they both support Iran. I am beginning to suspect that Obama doesn’t have any plan for managing the US decline, and possibly no such plan is possible. It is as Chalmers Johnson predicted in his trilogy, US militarism is defeated historically by bankruptcy.
http://www.truthdig.com/report/page2/20090614_
the_american_empire_is_bankrupt/#246447
So, Hedges is just saying that the economic problems created by our out of control spending habits is finally catching up to us. His critics are arguing not that we haven’t been wasting our money, but that the world is still not ready to end the extortion scam we’ve been running.
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