While I completely agree that they just want to cut spending, it’s worth noting that the whole exorbitant privilege hinges on the global demand for the dollar. The idea is that US can issue as much currency as it wants, and the rest of the world will buy it up. The main reason for this traditionally was that oil was traded exclusively in dollars, and every country needs oil to operate, so you had a constant demand for dollars. Now, there’s a whole alternate economy out there that’s completely independent of the dollar, and dollar based economy is shrinking every year.
Yea, with rise of alternate currencies, US dollar may lose the “exorbitant privilege” of being able to import whatever it wants.
However, that doesn’t mean U.S. or any other country cant mobilize internal resources by creating as much money as needed. The problem with the US is that it’s not investing in productive capacity, wasting away resources on military (which is always left out of the debt discussion).
There is also the fact that US and most western capitalist countries are always demand constrained because of inequality and unemployment.
Right, lack of productive forces and the fact that the resources that are present are being misused are the actual problems. The thing is that there’s no clear path from the way US economy operates currently to a more sensible economy. As long as the financial oligarchs are in charge they will insist doing what they’re currently doing. So, while the problems caused by debt are artificial, they are also inherent in the way the current system is structured. Addressing these problems requires restructuring the system.
While I completely agree that they just want to cut spending, it’s worth noting that the whole exorbitant privilege hinges on the global demand for the dollar. The idea is that US can issue as much currency as it wants, and the rest of the world will buy it up. The main reason for this traditionally was that oil was traded exclusively in dollars, and every country needs oil to operate, so you had a constant demand for dollars. Now, there’s a whole alternate economy out there that’s completely independent of the dollar, and dollar based economy is shrinking every year.
Yea, with rise of alternate currencies, US dollar may lose the “exorbitant privilege” of being able to import whatever it wants.
However, that doesn’t mean U.S. or any other country cant mobilize internal resources by creating as much money as needed. The problem with the US is that it’s not investing in productive capacity, wasting away resources on military (which is always left out of the debt discussion).
There is also the fact that US and most western capitalist countries are always demand constrained because of inequality and unemployment.
Right, lack of productive forces and the fact that the resources that are present are being misused are the actual problems. The thing is that there’s no clear path from the way US economy operates currently to a more sensible economy. As long as the financial oligarchs are in charge they will insist doing what they’re currently doing. So, while the problems caused by debt are artificial, they are also inherent in the way the current system is structured. Addressing these problems requires restructuring the system.