14.01.2009
January 9, 2009 (the date of publication in Russian)
Maxim Kalashnikov
HOW TO SAVE THE USA FROM DEAULT
Creditors to the USA must offer Obama to cut military spending and immediately get troops out of Iraq and Afghanistan
One trillion dollars is what (at least) the USA budget deficit might reach in 2009. Americans seriously fear that the huge national debt will suffocate country's economy. The extension of medical insurance expenses – Obama's favorite pre-election subject – will anyway lead to the collapse of the whole system, as the population of the country is aging. At the same time Obama will have to look for means to finance almost 800-billion new "stimulus plan" for the sake of saving the collapsing US economy.
Since October 2008 (and financial year in the USA begins in October) the government of the country has spent $408 billion more than it assembled into the treasury. Also a huge hole in the budget was made by $700 billion which G. Bush assigned to help banks ("Paulson's plan"). The revenue derived from taxes decreases as unemployment grows fast and corporations' incomes reduce. The budget deficit threatens to reach one trillion dollars plus, which will beat the record of George Bush Junior (it was $455 billion in the end of 2008 financial year) and reach the record highest point since WW2-era.
Particularly The New York Times says about that. No one knows what to do. Obama says something inarticulate about tightening fiscal discipline and appointing competent administrators. It's already obvious, that the US government can't cope simultaneously with the decrease of state income, the growth of national debt, the necessity of huge anti-crisis charges and budget's balancing. The improvement of the dollar exchange rate objectively makes the burden of the US national debt heavier and brings competitiveness of its export down. On the contrary, for the sake of national debt servicing USA used to devalue the dollar periodically – like in the middle of 1980s and in the beginning of 2000s.
It's time to tell the truth: as in a fairy-tail, the king is naked. If the present tendencies are in progress, both devaluation of dollar and the USA default in payment of national debt will be unavoidable. It is only the question of time. If this happens, the whole world will drown into a horrible crisis, the one that old-time communists expected in the beginning of XX century, looking forward to world revolution. The consequences of the US economy collapse for the world are unpredictable. The global economy is excessively dollarized, too many economies are "tied" to the US markets. Therewith the threat of chaos in the USA (the country with nuclear arsenal) appears. The US condition resembles the USSR in the summer of 1991 more and more. Now there is only one way to prevent economic catastrophe. As well as it was with the USSR government on July of 1991, the world must stipulate the US immediate curtailment of unproductive and wasteful expenses of the budget. Of course compelling the USA to begin getting troops out of Iraq and Afghanistan is essential, as it will cut down the expenses of the state at least by one fourth of a trillion dollars per year. In addition, it's necessary to reduce the US military budget at least to a half by radical diminishing the number of new arms programs. This will release about 200-250 billions more.
It became clear long ago, that there was no war against terror in Afghanistan and Iraq, but a Huge Drug Dealing was shaded and a "feeder" was created for both Pentagon and private corporations, which were drawing budget contracts. The continuation of this policy is fraught with world social-economic tragedy. And this no more is the US internal business.
I suppose, Moscow ought to take an initiative and gather world congress on the problem of prevention of the US economy collapse and its restructuring. Putting this off is awfully dangerous for everyone.
We could offer Europe and other creditor nations to the USA concerted efforts to force Washington to accept a "package of expense-saving measures" and "giving up imperial ambitions". In particular, the threat of refusal to buy treasury bonds, paying credits taken in the US banks not with money, but with American government's obligations can appear among them. In addition to that, Europeans might refuse providing military contingents to serve in Afghanistan and Iraq.
We need to warn Washington: our attention to your problems will not be diverted either by possible war between India and Pakistan, or by probable mega terrorist act with using of weapons of mass destruction in the very USA.
Only firm mutual actions can prevent global social-economic catastrophe. Someone must decide to take an initiative in holding an international forum to discuss the US economic problems. I suppose, Moscow has all the chances to do that. Otherwise, the very Russian Federation will be severely hit by the Globocrisis.
Number of shows: 1325
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