The dollar, because of astronomical government debt now at $21 trillion, a debt that will be augmented by Trump's tax cuts costing the U.S. Treasury $1.5 trillion over the next decade, is becoming less and less trustworthy. The debt-to-GDP ratio is now more than 100 percent, a flashing red light for economists. Our massive trade deficit depends on selling treasury bonds abroad. Once those bonds decline in value and are no longer considered a stable investment, the dollar will suffer a huge devaluation. There are signs this process is underway. Central-bank reserves hold fewer dollars than they did in 2004. There are fewer SWIFT payments""the exchange for interbank fund transfers""in dollars than in 2015. Half of international trade is invoiced in dollars, although the U.S. share of international trade is only 10 percent.
When the country's financial system unravels, the dollar will become even less stable, prompting further international efforts to shift to other currencies, more economically motivated belligerence from Washington, and so on. The reality that America's economy will be not just internally vulnerable during the next crash, but also lacking in support from the other biggest superpowers, is apparent from America's uprecedentedly strained relationship with China. Unlike last time, China isn't going to bail out the U.S. economy amid this next downturn.
The U.S. will soon be more economically weak and globally isolated than it's ever been throughout its existence as an empire. And I say that with the Great Depression in mind, because the economic collapse we're about to face will consist of more than the traditional financial factors. It will also be tied in with the collapse of the climate.
What will make the damage from the crash irreversible: runaway climate change
Here my analysis grows even broader. In its imperialist stage, capitalism has not just expanded corporate power so much that it's strangled the economy's ability to sustainably function. It's exploited the natural world too much for civilization to continue to exist on its traditional scale. Over 70% of carbon emissions are made by the top 100 largest corporations, and the U.S. military is the world's single largest polluter. These institutions, which are perpetuated by U.S. imperialism and its bombings, drone campaigns, occupations, and global proliferation of neoliberalism, have driven the planet to an ecological and climatic breaking point.
The current consensus is largely that global temperatures will likely warm by around three degrees Celsius by 2100. This will make oceans at least a meter higher by that point, displacing over 700 million people through floods. In such a scenario, many of the world's arid regions will also become unlivable, prompting unprecedented mass migration as the world is beset by conflict and resource shortages. In the next ten years alone, this process will already be very far along, with over 120 million additional people estimated to be driven into poverty by 2030 because of climate change. This number gives a rough idea of the amount of fires, floods, agricultural failures, storms, breakdowns of infrastructure, and water shortages that will have happened by 2030 in order for these many people to lose their livelihoods.
Yet it's not even inevitable that these many people will enter into such privation. If they do, it will be the result of a system that prioritizes the safety and comfort of the rich over that of the lower classes. The UN report from last year that estimated this will happen to 120 million people goes by the assumption that these disaster victims will be neglected by capitalism, creating what the report describes as a situation of "climate apartheid." In this respect, capitalism will make its own crisis even worse in the years during and after the next economic crash.
During the mid-2020s, which is likely when the economic disaster will be in full force, the people struggling with home foreclosures, unemployment, and unpayable debts will also be experiencing heightened versions of the natural disasters from the last decade. In the U.S., hurricanes will be pounding the Eastern and Southern coasts, fires will be ravaging the West, and drought will be intensifying throughout the continent's West and center. The climate's destabilization will of course be impacting the rest of the world, perhaps most severely through the future fires in Brazil and Australia-which alarmingly are two countries that have aggressively embraced neoliberalism. Unlike in socialist countries like China, the capitalist world will be hit hardest as climate change continues, because capitalism leaves the poorer people behind in situations of crisis.
The climate-related crises that poor people in the U.S. alone have recently faced shows how much worse the economic crash will make their plight. Amid rapidly declining living standards and a new wave of austerity, poor people will less likely be able to find nourishment and shelter in the aftermath of a superstorm. It will become harder for lower class people in the Southwest to afford water. The Californians who will have their electricity regularly cut off in the coming years because of the power grid's exacerbation of fire risks won't easily be able to manage the financial damages from these events. Given how costly recent hurricanes have been, tens or even hundreds of billions of dollars will be lost each year due to damages from climate change, making the coming depression even more severe.
Ultimately, climate change will cause an irreversible contraction of markets and commerce by shrinking the amount of habitable space and reliable agriculture. Capitalist markets are about to overall enter into an era of rapid decline, and their potential for a rebound will be made harder by the fact that socialism is going to gain great economic power throughout this century. China's Belt Road Initiative is reorienting the center of global markets, and a wave of anti-capitalist uprisings has begun around the globe. The fall of the American empire will precipitate the decline of global bourgeois bargaining power, eventually putting the main economic leverage into socialist forces like the Communist Party of China.
In the business world, capitalists are looking to adjust their efforts for obtaining profit amid an unstable future. "Investors increasingly are asking companies to disclose the steps they are taking to prepare for a warmer planet," reported a Wall Street Journal article this week. "'Climate risk is investment risk,' Laurence Fink, chief executive of BlackRock Inc., the world's largest asset manager, said in his annual letter earlier this month."
In the political world, the current anxieties of the ruling class involve threats more alarming than "investment risk." The near term stability of capitalist society is in question. The system has consumed too much of humanity and nature, so now the system is eating itself. Mass surveillance, censorship, militarized police, the erosion of civil liberties, and border militarization are how the imperial core has dealt with the destabilizing events of the last two decades. When things really start to unravel, these tools for maintaining control will be put to the test.
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