In March, the United States Government will max out its national credit card and in order for the Treasury to borrow more money, Congress will be required to raise the debt ceiling. This is red meat for the incoming Tea Party Republicans, who ran against running up debt that will saddle our children, grandchildren and their kids, dogs, chickens and cats with unspeakable horrors.
In order to protect the progeny from a lifetime of service to the debt, the Tea Partiers are threatening to block this otherwise routine bill. Those who pass for responsible adults in both political parties are eyeing the insurgents nervously because they know that the dollar only exists in the form that we know it because it is valued by a continuous demand for dollar denominated debt issued by the United States Government and backed by its full faith and credit. Full faith and credit in this instance means ongoing tax revenues from us all, no matter how high they might go, no matter what those borrowed dollars might get spent on. Anyone who has traveled internationally knows that the dollar is a very special currency. It is not just our internal means of exchange, but is an economic universal solvent for all other currencies in a way that few others are.
The ability to print dollars backed by debt instruments is what allows the United States to finance the military enterprise consisting of almost 1,000 foreign bases, two and a half active military conflicts, and to provide a significant backstop to cover banksters’ gambling losses on the Wall Street casino.
No objective observers ever claimed that the populist anger stoked by billionaire financing of the various Tea Party operations was rational. Who can forget those “Keep your government hands off of my Social Security” signs held up by wheezing obese white seniors on Medicare financed oxygen tanks and scooters?
When that wild irrationality harmonizes with progressive radical goals, as in stopped clocks tell accurate time twice a day, then it is time for progressives to unite with the Tea Party on this issue and demand that the Congress refuse to raise the debt ceiling. Unlike the Tea Party, progressives should demand this because it will cut off the cash flow that threatens to condemn American workers to a lifetime of declining incomes in service of the Wall Street and military sectors so that the elites can continue to maintain the global south in low wage peonage and squalor.
The debt dollar is an economic armament created by keystrokes of bankers. These armaments are used to power a military that the United States’ economy otherwise could not afford. But those dollar weapons are also used in economic conflict. With the dollar universally accepted as valuable and the United States Government able to generate dollars at will through issuing debt, the dollar is used as the primary tool of United States economic domination over countries for various reasons.
We know that the military has been used to condemn hundreds of millions to lives of squalor amidst plenty as brutal dictators have acquiesced to the exportation of raw materials to the United States as bargain basement prices. We also know that asymmetrical (terrorist) attacks are often responses to that brutality which fuels the vicious military cycle known as the “War on Terror.” But the dollar has likewise been used to allow the United States to import more, less expensive goods not based on the value of our own product and exports, rather on the artificial valuation of our funny printed paper.
The dollars that the Treasury creates through floating debt are expensive dollars not just because of the interest paid to bond holders. When the government issues debt, when the Federal Reserve fabricates dollars out of thin air, they do not sell those dollars directly to investors or to in the case of the Fed to the Treasury. No, they sell those dollars at a discount to the “Primary Dealers,” the massive investment banks such as Goldman Sachs, Citigroup and JP Morgan, to name a few. These Primary Dealers turn around and sell those bonds for a premium to the final purchasers, taking a little off the top of a shitload.
When the United States Government can no longer foist that funny paper off on the rest of the world, either because of an evaporation of confidence in its value or because of a statutory limit on how much it can borrow, then the global south will be free from dollar economic hegemony and from the military intimidation and brutality that those dollars create out of thin air.
The artificially and high standard of living in the United States is unsustainable and must fall back to earth, because sustaining it based on subjugating the global south to unspeakable conditions is unconscionable. Global southerners, not to mention the emerging industrialized nations of Brazil, Russia, India and China are having no more of it. The end of the debt dollar means the end of dollar dominance of the global economy and the sprawling imperial military in service of the kind of un-American foreign policy revealed by Wikileaks, resulting in a load taken off of the back of the two billion poorest earthlings and American taxpayers alike.
That will leave us to fight the domestic economic fight where we contest the allocation of domestic dollars against the elites, those that are neither valued by that which we produce, not by speculators’ bets. There is much more political latitude in allocating how domestic dollars are deployed, with prices being determined by domestic supply and demand. The best path towards delivering on progressive values will be stripping the dollar of its global power so that it can serve our needs at home first.
Freed from the double duty of domestic currency and debt instigated global imperial universal economic solvent, the New Dollars can be made to work the will of the best interests of Americans rather than global investors. This means that wholly domestic programs like Social Security and Medicare, perhaps single payer health care, will become eminently feasible as they are in nations whose currencies are not based on the global reserve currency.
It is time for progressives and radicals to move in for the kill, for us to put our money, as it were, where our mouths are, to take advantage of the suicide pact that the Tea Partiers’ contradictions have invited, to leverage their power to achieve our ends. Yes, this is going to hurt going in, but after a while, you get used to it and it begins to feel good.