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America Now Extremely Vulnerable to Financial Warfare

By       Message Craig Harrington       (Page 1 of 1 pages)     Permalink

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During much of the post-war era the United States has intentionally pursued policy measures which undermine domestic employment and stability for the sake of other nations’ interests.  After two cataclysmic world wars and the creation of a potentially fatal East-West standoff in the Cold War the U.S. pushed “free trade” as a means of reducing the call for armed conflict.      

This push worked, at least to some degree, in preventing the major powers of the world from bearing arms against one another in shooting wars.  But it simultaneously created a new system where economic warfare would become the name of the game. 

The U.S. does not need to worry about being drawn into the endemic warfare of Europe because the shared economic system is too profitable to them, they would never risk destroying it.  However, this has not stopped European countries from using the economic system to their own advantage so as to get the upper hand on us.  The same could be said of China, Japan, India, and our “free trade” partners in North and South America.

The United States is so heavily financed by foreign creditors that a number of nations hold so-called “debt bombs” with the potential to cripple the American economy.  China, Japan, the UK and others hold hundreds of billions of dollars in U.S. Treasury bonds.  If they were ever to release these into the international market en masse it would undercut the American dollar and create conditions for a rush out of our market.  In essence, several nations around the world hold the capacity to do serious damage to our economic system should they ever choose to do so.

Up until now this has not happened because some bombs are more influential when held in reserve than when used in combat.  The United States has to acquiesce to foreign demands on many economic and diplomatic policy ends so as to guarantee that its creditors continue lending.  If the United States acts up too much it is possible that lines of credit would be cut.  In a worst case scenario our creditors would choose to dump their debt holdings on the world market in an economic show of force.  Both would be devastating to the United States.

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During her recent overseas trip, Secretary of State Hillary Clinton spent a significant amount of her time trying to convince our creditor nations – specifically Japan and China – that the United States was still a vital and cooperative member of the international system.  She went out of her way in claiming that the Treasury was still a sound investment and that there was no need to fear “protectionist” agendas on the domestic front.  She did this not because it was true (the Treasury is a battered institution at this state), and not because it was in our best interests (the U.S. needs “protectionism” now more than ever).  The United States Secretary of State went overseas begging for a handout and promising that her country would not ruffle any feathers.

Is this the character of a superpower?

The United States must agree to international conditions and demands from other developed economies as if it were accepting terms of surrender.  Our government and our elected leaders have gone so far in crippling and undermining the nation that they have sworn to protect the policies which make it so that we cannot even dictate our own policy agenda without need for international consent.

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The worst part of all of this is that our government continues to guise overt economic warfare under the veil of “cooperation.”  We are unwilling to accept the fact that we are being dictated to.  Because of this the people are largely in the dark about the whole issue.  The U.S. cannot recover its former place in world affairs if it is constantly forced into conditions by other countries.  We need to stop the ignorance and stop the hypocrisy.  This nation needs leaders who are willing to bite the bullet and accept the consequences of decades of listless policy. 

Both the Democrats and the Republicans have failed this country for over a generation.  Without real change we will simply be stuck in the same rut indefinitely.


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Craig Harrington is pursuing a degree in History and Political Science at The Ohio State University. He is also a journalist for EconomyInCrisis.org.

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