The United States: The World’s Largest Debtor

The United States government is in trouble. The month of October and its fiscal year began without an approved budget, which lead to ordering 800,000 state employees to their homes for anticipated vacations. Although it was decided to pay their salaries, the uncertainty of internal politics in U.S. government power is transferred to the workers and their families.

The debate is about some $40 billion from the budget that has created for four consecutive years a fiscal deficit of $1.5 trillion, which explains the United States’ public debt of $16.7 trillion, surpassing the permissible debt limit.

The U.S. Department of the Treasury reported that U.S. debt stock reached approximately $16.75 trillion, and the maximum authorized by Congress was $16.7 trillion. The government has taken more than $48 billion of public debt approved by the U.S. Congress.

We can affirm that this is the financial problem in the United States, given that the first world power of capitalism is a failed state, without its own resources and needing financing from the world. The deadline for obtaining congressional authorization to extend its borrowing capacity expires on Oct. 17.

The Obama administration is relying on that extension and the world to continue trusting in the dollar and the U.S. Treasury, and thus will continue demanding government bonds with the “Made in U.S.” cancellation guarantee.

Not surprisingly, the U.S. Federal Reserve prints $85 billion every month for the bailout of its economy, the epicenter of the global crisis. These are dollars that flood the global market and nourish a new cycle of the financial bubble that always bursts, to the detriment of the junior and entry-level sectors, in the United States and in the world.

Argentine Negotiations in Washington

As this is occurring in the imperialist power, Argentina maintains open negotiations in Washington, with an impact on its own local public debt.

On one hand, the U.S. Supreme Court will not take the appeal made by the Argentine government against the decision of cancellation presented 100 percent by external debtors, approved on the first and second instances in New York. The judgment is for about $1.3 billion, and it will constitute a precedent for other claims for some $10 billion resulting from an increase in debts on the universe of creditors who entered into debt exchanges in 2005 or 2010.

On the other hand, from the International Center for Settlement of Investment Disputes there are lawsuits against the country for the enforcement of awards totaling $500 million. These are actions taken by transnationals that felt affected by the change in exchange rate policy at the beginning of 2002.

As if this were not enough, from Washington, the International Monetary Fund is pressuring for the evaluation of changes in the measurement mechanisms of Argentina’s National Institute of Statistics and Census, according to the agreement duly signed by the agency and the local government.

What Lessons Can Be Drawn from This Situation?

The hegemonic role of the United States and its capacity to transfer crises to the world system is clear. The United States became a power coming out of World War II as the great moneylender of the world. Since then it has had the leading role in the high point of world domination, flooding the planet with military programs and bases, leading invasions and covert and overt operations through the financing of terrorist activities.

Our question is whether the world should continue financing state terrorism and, further, whether to support the institutions that facilitate United States global power. Of course we are referring to the global financial order and to the role of the agencies where the United States has decision-making power, in the case of the IMF and the World Bank with their agents and annexes, and in the case of the International Center for Settlement of Investment Disputes.

Argentina should leave the International Center for Settlement of Investment Disputes, as other countries of our America have done, like Venezuela, Bolivia and Ecuador, and that is even considering the fact that Brazil never adhered to the International Center for Settlement of Investment Disputes protocol. Ecuador is organizing an International Commission to consider the denunciation of the bilateral treaties that bind the country to pressure from multinationals on the “legal certainty” of their investments. This is the path that was already successful at auditing and investigating the public debt to determine the illegitimate proportions.

While the United States closes its government for internal political disputes and negotiates authorizations to raise the public debt limit, those countries with autonomous ambitions should withdraw from any institution that nourishes the degradation of the United States, who in their desperation only wish to increase their global gendarme role at the expense of a debt whose cost falls on the poor in the United States and in the world.