US and the Global Crisis

Twenty-five years ago, the Ronald Reagan-Margaret Thatcher duo launched Neoliberalism and globalization, giving markets complete freedom to independently decide on the destiny of the economy. They therefore installed a global economic system that left the true government of the world to multinational businesses, monopoly corporations and financial organizations, especially the International Monetary Fund and World Bank. In addition, a fierce speculative exchange was established within the economic system. Therefore, the current enormous capitalist crisis is not a simple accident, but instead, the result of this experiment, rooted in voracious commercialization without remorse, where the poor will be poorer and poorer and the rich, richer and richer.

All during these years, the practical application of Neoliberalism and free trade also rapidly changed the feeble significance of representative democracy and governments worldwide at their core, since globalization, dependent on economic power, is an ironic shawl in which to wrap a vertical and totalitarian political system. It should be noted that effective leadership does not lie in governments, but rather, in the final decisions of the conglomerations between private banking and multinational companies. Indeed, elections and those elected serve only to change out administrations but never to alter, or at least, modify them. In this way, formal democracies, presented as models, survive on appearance and are little more than a pipe dream in the name of liberty — liberty where the citizen has lost his determining character, becoming a mere, unpredictable consumer. Thus, the United States, the leading country of the economic system transferred to every other nation, is in serious trouble today, and not just because this October it had to send nearly a million federal employees home on leave, but because the fiscal year’s budget presents a deficit of enormous proportions for the fourth consecutive time, without a possible recovery in view.

The U.S. had the irrevocable ability to change the gold standard for currency exchange — that is to say the U.S. dollar — during the Nixon administration, and since that time, with printed paper, it went from being the ultimate dream of a global economy to, nowadays, the most heavily indebted country on the planet, even if on the basis of its economic, military and political power, and not paying its debts, nobody dares call in the costs. The financial problems of this first world power of capitalism have changed the U.S. into a technically bankrupt country that falls back on the help of other economic powers to support itself and the Federal Reserve for printing $85,000 on a monthly basis, the only formula found for saving the economy at the heart of the global crisis. The inorganic emission of dollars floods global markets, fostering a new explosive cycle or financial bubble, setting back workers and the poorest people in both the U.S. and world.

The current problem within Barack Obama’s administration is that the government has surpassed its domestic borrowing power despite an annual fiscal deficit of $1.5 trillion and a national debt of $16.7 trillion, and has necessitated congressional approval and the suspension of civil service in the meantime. Obama believes in this authorization and also, of course, that the rest of the world will continue believing in foreign exchange and the determinations of the U.S. Treasury. We are speaking here of a national budget and domestic debt, or public debt, without considering the sizable external debt, which is not even mentioned in order to not scare off creditors, who, for the most part, are devoted to the paper hegemony of the U.S. and its power to transfer the crisis to the globalized system; in addition, they are following the military attacks, invasions, political domination, and support of dozens of military bases. The U.S. debt remains uncollected because the other industrialized powers have agreed to fund a form of terrorism at the globalized level, the same one that permits the appropriation of natural resources from the so-called developing nations, or in other words, the “emerging economies.”

Under the current circumstances, the global economic crisis does not have a way out because even the consolidation of the speculative capitals of financial markets will never be able to serve as an economic system for development, growth and well-being in the world. The IMF has already detected this crisis, including growth: This week, it announced a reduction of 30 percent, fixing its estimate of world economic growth for 2013 at 2.9 percent, as indicated in the recent report, “World Economic Outlook.” According to the IMF, the large, industrialized economies will show an expected growth of 1.2 percent by summer, and in 2014, the rate of growth could reach a maximum of 2 percent.

As for the emerging economies, sarcastically named because they primarily export goods, they grew 4.5 percent this year, half a point less than predicted last July. Upcoming in 2014, growth should reach 5.1 percent, 40 percent less than hoped. In general, growth of the “emerging and developing economies” will remain at a high level of 4.5 to 5 percent in 2013-14, states the IMF report. It is taken for granted that this “high” level will always be reached, as long as extremely impoverished countries continue going along with multinational investors, who come with shameless zeal to get a hold of their natural resources, and where most often, they respect neither local citizens, nor the inhabitants suffering from the seizure of their lands, valleys, rivers and mountains.

Carlos Angulo Rivas is a Peruvian poet and writer.