Sunday, July 5, 2009

Is The American Empire Bankrupt?

Kyle Murphy asked for my thoughts on Chris Hedges' column, The American Empire is Bankrupt. The article morns the dollar's passing as the world's reserve currency, and predicts increasing inflation as foreign central banks divest themselves of the dollar. Alarmist would be a good description, it closes:
The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value ... America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite.

I think US fiscal policy gives cause for concern, but I don't believe the situation is as dire as Hedges forecasts. I'd like to take HIST 302, GMU's only class on ancient Rome, to better understand America in the context of an overextended empire. On a lighter note, today's Dilbert could also be a response to Chris Hedges' essay.

1 comment:

Pete Abbate said...

Finally got to read the thing from start to finish - it's almost comical. Think of the South Park episode from immediately after the election, where the anti-Obama camp spends the first night in a cave (and refuses many people entry, believing they can only sustain a small population).

You're right, we don't exactly have wonderful fiscal policy right now. But the post is dated June 14 and last I checked, the dollar has in fact not lost its status as the world's reserve currency. In fact, the BRIC nations ended with a very cautious statement about the dollar (New York Times summary). Let us not forget that China would be screwing themselves first and foremost by an immediate change in world reserve currency... we are still years away from any real transition taking place.

Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant. ~Fredrich Hayek in The Constitution of Liberty