Crisis in the U.S., More Than Just the Debt

The crisis in the United States continues to be the center of attention in the economic debate. It is not only a question of the public debt and the possibility of defaulting in the next few days, but it is also a matter of concern to domestic and foreign creditors. Domestic creditors hope that either Congress or the executive branch issues an adjustment to the debt. Foreign creditors expect the U.S. to favor making payments over watching a global meltdown. In any case, what will result is the hidden modus operandi of the imperialist power, which will emphasize the imperialistic character of the U.S. in terms of its logic to export its problems or, in other words, solve its problems at the expense of global society.

Due to the strength of the dollar, as well as economic, military and cultural power, the United States has been able to dominate the global system. The U.S. economic crisis brings up the question of the United States’ capacity to dominate. This question is a serious one.

The outlook is negative. The predicted growth for the second quarter of 2011 was 1.8 percent versus the actual growth of 1.3 percent. The predicted growth during the first quarter was 1.9 percent and the actual growth was 0.4 percent. These first six months of 2011 indicate slight economic growth, something unexpected in recent times. Finally, growth in the last quarter of 2010 was revised from the predicted 3.1 percent to 2.3 percent.

In addition, the numbers should correct themselves in reverse order, highlighting a more severe situation than the one in 2008 and 2009 when the crisis became apparent. The GDP fell 0.3 percent in 2008 when people spoke only of stagnation (0 percent) and fell 3.5 percent in 2009 instead of the predicted decrease of 2.6 percent.

The adjustments of local and state governments had a direct impact on the rise of unemployment, which affected more than 14 million Americans, nearly 10 percent (excluding undocumented individuals). This explains why neither Bush’s liquidity injections ($7 billion) at the end of 2008 nor Obama’s ($8 billion) at the beginning of his administration in 2009 were enough.

At the structural level, the issue is more serious because the U.S. has accumulated a significant trade deficit since the 1970s and an alarming fiscal deficit due to the Bush administration’s decision to militarize the global economy. Militarization includes the invasions of Afghanistan and Iraq, raids in Pakistan and America’s threats to become militarily involved in Iran, North Korea, Libya and other important regions, including our own. Military bases and war exercises involving figures in the billions explain why the deficit in public coffers is nearly $2 trillion. The debt is a matter of concern and debate in these hours as Congress argues whether to meet the demand of the executive power to expand the borrowing capacity from 100 to 120 percent, i.e., $14.3 billion to about $18 billion.

The structural and cyclical problems of the U.S. economy impact the global economy, including countries with high levels of growth. Some argue that in terms of this crisis, the economies of countries in the South better demonstrate indicators of growth (not including China, which is associated with a surge of investments originating from countries in crisis, including the U.S., Europe and Japan). Some seek to explain the increase in capital of emerging economies like India, Brazil and South Africa. Recently emerging economies are visible as suitable places for investment and profit, which would ensure the continuity of the accumulation of capital and guarantee that the surplus be repatriated to the originating countries.

It must be recognized that the international inflation of the price of commodities including soy, wheat, oil, gold and other materials is part of the global crisis. The evolution of such prices is subject to uncertainties that the economic policies of countries with relatively little say in global decision-making cannot resolve.

When the most powerful countries have an economic crisis, the rest of the world pays the price. When problems of social dissatisfaction emerge, as in the case of housing in Jujuy, they are followed by repression and death. This is not resolved with a large amount of international reserves, especially if the reserves are affected by worldwide uncertainties and the variability of external economic conditions.

It is essential to ask about the fate of independent economic surpluses and international economic integration, because the choice will be either to stabilize global problems or to generate a new order. This new order would involve redefining and redirecting integration, determining the model of production and circulation and establishing who and what this new order is for.

These are questions and choices that do not transcend the existing integration agenda and should be included without delay. The global monetary dispute is a fact. There are countries that promote the internationalization of their currencies. Maybe it is the moment to discuss the question regionally, making the creation of the Banco del Sur a priority and part of a broader strategy to encourage a new financial foundation for our America. The bank would be a new financial and monetary institution that aims to resolve people’s unmet needs in terms of housing, food, employment, education, health and culture.

Although resources exist, insistence on a path toward capitalism, despite the crisis in the U.S., is a problem. Without a doubt, capitalism is systemic, and brings with it inequality, misery and exploitation.