Portuguese columnist Vasco Pulido Valente once described the current Portuguese Prime Minister (José Socrates) as “a fireman who was called when the house was on fire” (free translation, original sentence in Portuguese). He said that to mock the Prime Minister’s (unhealthy) obssession with (trying to get rid of) the national debt. Well, Portugal’s situation may not be that famous, but that of the US may be even worse (with all that entails for the rest of the world).
The first comment to that news was this:
Deficits don’t matter. All that matters is that your dogs are bigger and meaner than the debt collectors’.
This witty reply followed (emphasis added):
that might be true if our society weren’t so dependent on global trade. but if our trade partners suddenly cut all economic relations with us our domestic economy would collapse. we depend on other nations for manufacturing, investments, and imports/exports.
we might be able to raid other countries for their oil, but we can’t use military coercion to force other countries to import our goods or manufacture our raw materials. and since our trade relations with other nations are generally good for us, bad for them, if we’re no longer an economic superpower, i imagine most of the developing nations we exploit would cut their ties with us and just nationalize the resources we’ve hijacked from them like Venezuela has done.
i mean, if we don’t have money to lend other nations, the IMF & World Bank would cease to be relevant. and without the power and influence of the IMF/World Bank, we wouldn’t be able to dictate the domestic policies of other nations anymore. so 3rd world nations who’ve allowed us to privatize their industries and open up their markets to us would cease to allow themselves to be exploited.
and quite frankly, we need them more than they need us. many American-based corporate conglomerates would tank if our globalization policies were reversed. WalMart and other retailers wouldn’t have cheap sweatshop made goods to sell. Monsanto would lose most of their profits made from selling developing nations GMO seeds every planting season. and 38% of Microsoft’s annual revenue comes from sales outside of the U.S. heck, Hollywood makes more money from foreign ticket sales than from the domestic box office ($12 billion a year versus $9 billion).
if our money was certainly no good internationally, or if countries like China decided to collect on our debts, we would be royally screwed.
Talk about putting things in perspective 🙂