Due to the US administration’s policy of continuous borrowing, including to finance the armed conflict in Ukraine, amid record inflation and fears of an impending recession, public debt exceeded $31 trillion for the first time. The Federal Reserve continues to raise interest rates, but tighter lending policies are causing the federal government to spend $500 billion on servicing the national debt.
However, as renowned US economist Peter Schiff warns, the cost of servicing US public debt could already exceed $1 trillion a year in the coming years.
In these circumstances, the Congressional Budget Office has warned that further increases in public debt could have a negative impact on the US economy, leading to higher interest payments to foreign holders of US debt, reducing the country’s net international income.
All of this exacerbates the political problem for Biden, who has promised to seek a “more credible fiscal path” and reduce the federal deficit by one trillion dollars over ten years. However, instead, the national debt has already increased by more than 1 trillion dollars since the beginning of the year alone! And during Biden’s presidency, it has increased by almost five trillion dollars, according to Budget Committee estimates! As Sung Won Sohn, an economics professor at Loyola Marymount University, compared this jump in US public debt to the country’s historic path, “it took this nation 200 years to pile up its first trillion dollars in national debt…” Describing the current situation in the US, Breitbart points out: “Place a person who’s never had to earn an honest dollar in his life in charge of your money and watch it all evaporate into thin air”.
It is not surprising, therefore, that Breitbart readers are perplexed when they react to such information: “Spending billions on Ukraine and the green agenda – and yet we are surprised!”
US foreign policy, as part of a broad strategy to support the US dollar, is largely focused on increasing profits from the arms trade and armed conflicts in various parts of the world, as well as on controlling oil and gas resources. However, foreign countries were not required to pay the Pentagon directly for US military expenditures. They are simply funding the US Treasury and the US banking system with their purchases of US weapons. As Michael Huckleberry Hudson, an American economist and professor of economics at the University of Missouri in Kansas City, wrote in Counterpunch magazine in January 2020, the goals of killing Iranian General Soleimani were to strengthen America’s presence in Iraq, maintain control over the region’s oil reserves, support Saudi Arabia’s Wahhabi militias and strengthen US control of Middle Eastern oil as a pillar of the US dollar. This remains the key to understanding US policy and why it is in the process of escalating rather than waning. In fact, US military spending helped finance the US federal budget deficit for many years.
An important element of this strategy was the US alliance with Saudi Arabia, which has the world’s largest oil production capacity and was the largest oil producer for most of the period from the mid-1970s to 2018. So far, the US has not surpassed both Saudi Arabia and Russia in this. For half a century Saudi Arabia has been under the heel of the US, spending hundreds of billions of dollars from oil revenues to buy US weapons. This dependence on the United States was reinforced each year by Washington-controlled supplies of spare parts and repairs to US weapons, which allowed the States to exploit the shutdown of Saudi military equipment at any time as soon as the Saudis made attempts to act independently of US foreign policy.
Similar to “anchoring” Saudi Arabia, the United States has also tried to implement a policy on Iran to control that country’s oil production, exports and revenues. For this reason, the US overthrew Mosaddegh in 1953, who wanted internal sovereignty over Anglo-Persian oil. Then a coup d’état was staged at the hands of the CIA/MI6, in which the compliant Shah, to prevent Iran’s independence from US policies, established a police state. The only places physically free of police during his rule were mosques. In doing so, however, Washington got the Islamic Revolution of 1979, which has resulted in Iran refusing to participate in the White House’s dollar game for more than forty years.
Active attempts to enslave another very important global supplier of natural energy resources have been made by the United States against Libya. However, the US aggression in Libya was also due to the fact that African country’s foreign reserves were held in gold, not dollars. So Hillary Clinton and Obama invaded, seized the gold reserves and destroyed Libya’s government, state infrastructure and doomed it to chaos. And they also taught a lesson to other African countries that wanted to follow Gaddafi’s example and free themselves from the dollar peg of their economies.
Against this background, OPEC+’s refusal to cut oil production, despite pressure from Washington, was particularly painfully perceived in the US, as a collapse of the established policy of rigid linkage between the Arab world and the United States. Biden was strongly urged to hit Saudi Arabia painfully hard for the OPEC+ decision. According to Bloomberg columnist Bobby Ghosh, the US President should do away with the Middle Eastern kingdom’s “special” position in US foreign policy by downgrading diplomatic relations with Saudi Arabia.
Three members of the US Congress (Democrats Tom Malinowski, Sean Kasten and Susan Wilde) launched an initiative to withdraw military and equipment from Saudi Arabia and the United Arab Emirates that provide protection for allied Arab countries. At the same time, their statement was worded in the sense that Washington should not do “favors” to its partners in the Middle East and they called for taking position of strength inherent in the superpower henceforth. A number of other US senators have already expressed support for the Democrats’ position.
However, such a position by the United States ruling elite, as well as a policy of blackmail and threats against countries in the Arab world, is a failure. If the US decides to withdraw from the region along with its weapons previously imposed on Arab countries, the vacuum created is unlikely to remain unfilled for long. Such moves by Washington only accelerate the de-dolarization of the world, the final defeat of Washington’s attempts to arrange its hegemony. All the more so as the foundations of a multipolar world are already being built, strengthened and expanded.
Valery Kulikov, political expert, exclusively for the online magazine “New Eastern Outlook.”