The structural crisis of the USA

Michael Hudson (economist, formerly working for Chase Manhattan Bank, Arthur Andersen and Hudson Institute) writes in Rebelión about the structural problems of US economy and how the imperialist policies are self-defeating.

Rebelión: Para salvar la economía hay que sacrificar el Imperio. (To save the economy, the Empire must be sacrificed).

The article is too long to translate here but I will try to summarize its main points:

Circa 1776, Adam Smith reached to the conclussion that no goverment had ever paid off its foreign debt. Nor any private sector has either reduced, since immemorial times, its debt level (except via bankrupticy, moratory or denounce). These are the options that we have now open. But are not acceptable for public debate.

He argues that central banks around the world have been playing a more and more interventionist policy, not in any socialist sense, but via rescues, in a way that diverts the burden of bank indebtment to the consumers and industrial sector. Protecting finances and property only at the cusp of the economic pyramid.

He also argues that keeping the dollar strong is important for this scheme, as it makes foreing governments and companies to pay for the US expenditure in the dead-end militar sector. But, as it became obvious, when Chinese or Qatari investors have tried to buy US companies, the Empire is not willing to allow them into their economy. The result is a loss of interest for a dollar that does not allow to buy the real stuff. The dollar plummets and the ability of the USA to pay for its widespread military network around the World (the Empire) is much harder to mantain.

As the dollar goes down, imports to which US citizens and economy are quite addict (not in vain this country has the largest consumption per capita of the world, they call it GNP - I think) become just too expensive. So the USA asks other countries to save the dollar but these get nothing in exchange and fear the US unbalanced superpower so they look elsewhere.

Foreign countries have come to see the USA from the same perspective that the Bush administration looked at other countries: any economic potential has by definition a military character. (...) any alliviation of the obligations that the US economy has with foreign governments would not but allow that the USA keep or even increase their global military presence, building even more bases overseas and imposing an even a greater drainage for the dollar in the balance of payements. "Sustaining the dollar" has become a synonim of subsidizing the addiction of the US government to the imperial hegmonic diplomacy.