Surviving Capitalism (Not) : China Calls Our Bluff: "The US is Insolvent and Faces Bankruptcy as a Pure Debtor Nation but [U.S.] Rating Agencies Still Give it High Rankings"

We’ve lived so long under the spell of hierarchy—from god-kings to feudal lords to party bosses—that only recently have we awakened to see not only that “regular” citizens have the capacity for self-governance, but that without their engagement our huge global crises cannot be addressed. The changes needed for human society simply to survive, let alone thrive, are so profound that the only way we will move toward them is if we ourselves, regular citizens, feel meaningful ownership of solutions through direct engagement. Our problems are too big, interrelated, and pervasive to yield to directives from on high.
—Frances Moore Lappé, excerpt from Time for Progressives to Grow Up

Monday, July 26, 2010

China Calls Our Bluff: "The US is Insolvent and Faces Bankruptcy as a Pure Debtor Nation but [U.S.] Rating Agencies Still Give it High Rankings"

from Washington's Blog. This is the part of the article that interests me most:

Indeed, as I pointed out in 2008:

So why hasn't America's credit rating been downgraded?
Well, a report by Moody's in September states:

...For reasons that take their roots into the large size and wealth of the economy and, ultimately, the US military power, the US government faces very little liquidity risk — its debt remains a safe heaven. There is a large market for even a significant increase in debt issuance."
So Japan and Scandinavia have wimpy militaries, so they got downgraded, but the U.S. has lots of bombs....
The fact that America spends more than the rest of the world combined on our military means that we can keep an artificially high credit rating. But ironically, all the money we're spending on our military means that we become less and less credit-worthy ... and that we'll no longer be able to fund our military.

This relates to an argument that I made quite some time ago that the US operates likes a super terrorist in the world with a huge military force used to intimidate world neighbors into compliance with its demands.

It is primarily backed mostly by Western capitalists who benefit from the US Empire's hegemony and serves their interests. The developing third world led by China have great wealth, resources, and US debt which may be worthless, but must bend to the will of this Empire due to its possession of overwhelming force. Thus Western capitalists buy US paper to invest in the world's biggest bully, while China, etc, buy US paper because of similar fears and because they already hold so much US debt that they fear US bankruptcy. It all seems like such an incredible scenario and so extremely complicated in how it will play out.

I suspect that nature will bat last, that planetary resource limits and pollution limits will have major impacts in how this world drama plays out. The only salvation for working people is that they must find a way to take control of events or face increasing disasters--wars, famine, starvation, climate change, etc.