Going bankrupt: The US's greatest threat

[Sapiens]

Going bankrupt: The US's greatest threat
http://www.atimes.com/atimes/Middle_East/JA24Ak04.html

DISPATCHES FROM AMERICA
Going bankrupt: The US's greatest threat
By Chalmers Johnson

The military adventurers of the George W Bush administration have much in common with the corporate leaders of the defunct energy company Enron. Both groups of men thought that they were the "smartest guys in the room", the title of Alex Gibney's prize-winning film on what went wrong at Enron. The neo-conservatives in the White House and the Pentagon outsmarted themselves. They failed even to address the problem of how to finance their schemes of imperialist wars and global domination.

As a result, going into 2008, the United States finds itself in the anomalous position of being unable to pay for its own elevated living standards or its wasteful, overly large military establishment. Its government no longer even attempts to reduce the ruinous

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Good read, long article.

[Andreuccio]

Re: Going bankrupt: The US's greatest threat

Going bankrupt: The US's greatest threat
http://www.atimes.com/atimes/Middle_East/JA24Ak04.html



Good read, long article.

In his recent radio interview, EJ commented on the Iraq War. What I heard him say was that, while inflationary, it was otherwise positive for the economy. I'd be curious to hear him expand on that thought as it relates to the ideas expressed in this article.

[dbarberic]

Re: Going bankrupt: The US's greatest threat

We will never go bankrupt. We will just pay our creditors in devalued dollars.

[FRED]

Re: Going bankrupt: The US's greatest threat

We will never go bankrupt. We will just pay our creditors in devalued dollars.

You got it. iTulip oldy but goody from 2001:

"Of course, the U.S.A. is not going to go bankrupt. The point of this piece is to make the inevitable alternative obvious. The U.S. will repay its debts, backed with the full faith and credit of the US government. Debts will be paid in full... with itty, bitty little dollars."

[Rajiv]

Re: Going bankrupt: The US's greatest threat

You got it. iTulip oldy but goody from 2001:

"Of course, the U.S.A. is not going to go bankrupt. The point of this piece is to make the inevitable alternative obvious. The U.S. will repay its debts, backed with the full faith and credit of the US government. Debts will be paid in full... with itty, bitty little dollars."

The unanswered question is whether the creditors will continue to sell stuff to the US if these itty bitty dollars are used as payment -- they may just write off their losses and refuse to do business.

[c1ue]

Re: Going bankrupt: The US's greatest threat

The unanswered question is whether the creditors will continue to sell stuff to the US if these itty bitty dollars are used as payment -- they may just write off their losses and refuse to do business.

No, that's generally not how it works.

When depreciation games are played, the suppliers just ask higher and higher prices.

Areas with high profit margins will play the catch-up game vs. dollar depreciation so long as profits are not unduly endangered.

Areas with low profits (and high inelastic demand) will start playing the anticipation game - i.e. charging extra above and beyond anticipated depreciation.

Areas with low profits and elastic demand are going to get hammered - these might fall out of the US export game. Or they might start playing around with terms and actual deliverables...

Of course, energy and food generally fall more into the inelastic category.

[Mega]

Re: Going bankrupt: The US's greatest threat

Enjoyed that, VERY good..............i thought most of that for most of my life...............but i thought "Its Nuts"...........turns out i was RIGHT all the time!

The American Empire will fall, take the West with it?
Mike

[touchring]

Re: Going bankrupt: The US's greatest threat

The lines between elastic and inelastic is not always so clear cut.

People can cut down on cars and travelling (lately, i've been doing a lot more walking instead of driving, helps on the weight loss and health also!), but....

.... the kids are stuck to their newest bluetooth handsets and nintendo game set.

Probably explains how Tech and IT is doing much better than automobile, industrial and even other consumer companies at this point.

But at some point, the recession will hit all categories. I think oil is ready for a steep dive soon.

[touchring]

Re: Going bankrupt: The US's greatest threat

Enjoyed that, VERY good..............i thought most of that for most of my life...............but i thought "Its Nuts"...........turns out i was RIGHT all the time!

The American Empire will fall, take the West with it?
Mike

No, the West will get some buffer from BRIC, it's already happening, look at what the French, Australians and Canadians are doing.

Money talks.

[santafe2]

Re: Going bankrupt: The US's greatest threat

The American Empire will fall, take the West with it?
Mike

This is an asinine comparison, (not your quote Mike but the article). Enron was, at it's core, the stench of foul leadership that lead to it's demise. The US is not, and has never been, the sum of it's current leadership. We dislike our great leaders and loathe out less accomplished leadership. We are slow to change but great in our ability to change.

I've no idea who this Chalmers Johnson is, but he's a lot to learn. To think that a single run of the Executive Branch, even a hideously inept bunch like this one would bring down the US makes no sense to me. We're on the ropes, an idiot could see that, but this is when the US does it's best work. We often fall asleep unless we're pushed. See 1941 / 1968 as recent historical examples.

The writer makes every point by articulating some recent factoid. Who doesn't know these things? How can they possibly prove future direction? Does he want the US to admit that military spending at it's current level is idiotic? Of course it's idiotic. I think we get that but how about some real leadership from somewhere else.

Diatribe above not aimed at you, I'm just completely tired of the lack of world backbone when it comes to dealing with the US when we're at our worst, and we're at a serious low point. There are very few among us who don't see a big change coming.

[Jim Nickerson]

Re: Going bankrupt: The US's greatest threat

This is an asinine comparison, (not your quote Mike but the article). Enron was, at it's core, the stench of foul leadership that lead to it's demise. The US is not, and has never been, the sum of it's current leadership. We dislike our great leaders and loathe out less accomplished leadership. We are slow to change but great in our ability to change.

I've no idea who this Chalmers Johnson is, but he's a lot to learn. To think that a single run of the Executive Branch, even a hideously inept bunch like this one would bring down the US makes no sense to me. We're on the ropes, an idiot could see that, but this is when the US does it's best work. We often fall asleep unless we're pushed. See 1941 / 1968 as recent historical examples.

The writer makes every point by articulating some recent factoid. Who doesn't know these things? How can they possibly prove future direction? Does he want the US to admit that military spending at it's current level is idiotic? Of course it's idiotic. I think we get that but how about some real leadership from somewhere else.

Diatribe above not aimed at you, I'm just completely tired of the lack of world backbone when it comes to dealing with the US when we're at our worst, and we're at a serious low point. There are very few among us who don't see a big change coming.

I'm not sure I see a big WORTHWHILE change coming anytime soon, like in the next 5 years, at least not from national leadership in politics from either the executive or legislative branches. Things are not bad enough to force serious changes, all we'll get is more of the same bullshit, which may be labeled grapejelly or what have you, but the ingredients will be the same.

[WDCRob]

Re: Going bankrupt: The US's greatest threat

I've no idea who this Chalmers Johnson is, but he's a lot to learn.

Johnson was born in 1931 in Phoenix, Arizona. He earned a B.A. degree in Economics in 1953 and a M.A. and a Ph.D. in political science in 1957 and 1961 respectively. All of his degrees were from the University of California, Berkeley. During the Korean War, Johnson served as a naval officer in Japan. He taught political science at the University of California from 1962 until he retired from teaching in 1992. He was best known early in his career for scholarship about China and Japan.

Johnson set the agenda for ten or fifteen years in social science scholarship on China with his book on peasant nationalism. His book MITI and the Japanese Miracle, on the Japanese Ministry of International Trade and Industry was the preeminent study of the country's development and created the bustling subfield of what could be called the political economy of development. He coined the term "developmental state." As a public intellectual, he first led the "Japan revisionists" who critiqued American neoliberal economics with Japan as a model, but also attacked Japan for protectionism. During this period, Johnson acted as a consultant for the Office of National Estimates, part of the CIA, contributing to analysis of China and Maoism.[1]

Johnson was elected a Fellow of the American Academy of Arts and Sciences in 1976. He served as Director of the Center for Chinese Studies and Chair of the Political Science Department at Berkeley, and held a number of important academic posts in area studies. He was a strong believer in the importance of language and historical training for doing serious research. Late in his career he became well known as a critic of "rational choice" approaches, particularly in the study of Japanese politics and political economy.

Johnson is today best known as a sharp critic of what he sees as American imperialism. His book Blowback won a prize in 2001 from the Before Columbus Foundation, and was re-issued in an updated version in 2004. Sorrows of Empire, published in 2004, updated the evidence and argument from Blowback for the post-9/11 environment and Nemesis concludes the trilogy. Johnson was featured in the Eugene Jarecki-directed film Why We Fight, which won the 2005 Grand Jury Prize at the Sundance Film Festival.

[Tulpen]

Re: Going bankrupt: The US's greatest threat

.... the kids are stuck to their newest bluetooth handsets and nintendo game set.

The real problem is that they are not interested in anything else. The nihilist generation.

[Verrocchio]

Re: Going bankrupt: The US's greatest threat

Going bankrupt: The US's greatest threat
http://www.atimes.com/atimes/Middle_East/JA24Ak04.html

Fine article, but the title led me to expect an entirely different topic. The gist of the article is a persuasive argument against the enormous military spending of the US. However, the title suggested that the article would discuss the essential problem of the centrality and magnitude of the USA and the bonar in the current international system trade. It has become the country that is too big to fail -- the result would be enormous economic dislocation around the globe.