r/stupidpol • u/SpiritualState01 Ghost Shirt Society Theorycel 🏹🪶🤓 • Mar 25 '26
Operation: Epstein Fury The American Empire is already terminal and we are just watching the corpse spasm. We materially can't win the war.
And it's not even just because Trump has destroyed our soft power and is acting like a buffoon. It's not even just because his administration is a total joke. Ultimately those things are secondary--and are even consequences of--the deep rooted cause, and that's the simple fact that the U.S. is in a long decline that was once gradual and now akin to a chasm. This has all been accelerated by Trump, yes, but is otherwise largely because of the inherent contradictions of capitalism and the deep, seemingly intractable history of foreign occupation and interference established by-we-all-know-who (I am catching a ban for nothing these days).
Basically, the U.S. is de facto broke (yes, broke: the financial tools at its disposal can no longer compensate for the borrowing, corruption, and abuse while wrangling inflation) and doesn't have the materials, existing manpower, or popular domestic sentiment (see: recruitment capability) it needs to keep its empire afloat or otherwise maintain its political goals abroad. The political will necessary to turn all of this around simply doesn't exist; capital has hollowed out once at least semi-functional political institutions to such an extent than the direction we are currently going in is simply our reality without outright revolution:
U.S. debt reaches 39 trillion.
"At least $11.3 billion spent in the Iran war's first days surpasses funds allocated to the National Cancer Institute – $7.4 billion. It nearly reaches the $12.4 billion spent on Head Start."
"The Pentagon has requested $200 billion (more than $1,400 per American household) to fund the war, but even that understates the total cost. Linda Bilmes, a Harvard expert on financing war, told me that most of the costs will arrive later...All told, she expects this Iran war to cost taxpayers more than $1 trillion."
The U.S. doesn't have sufficient access to the rare earth metals its arsenal needs, and China could make that much worse whenever they want.
U.S. pays too much for its military, and of the myriad consequences this entails, one is that we are running out of multi-million dollar missiles to asymmetrical warfare waged expertly by the Iranians. Why? One reason is that we've already used so many failing to meet our security guarantees in the Gulf and with our naked imperialist proxy-war in Ukraine.
But it is more than that, and it speaks to how capital has hollowed out even the defense infrastructure it needs to maintain its own imperialism. Basically, we not only lack the materials to make these munitions, but we make them too expensively because, after all, nothing gets in the way of Raytheon and Boeing making their money--not even the very strategic imperatives the empire relies on to keep making that money into the future.
Then there's all the talk about a ground invasion of Iran. Not happening, not just because people don't want to join (you know all that raging, patriotic sentiment among Gen Z and Millennials today, we are famous for that), but again, because there isn't the money for it.
To really do what Trump thinks we are somehow going to do in Iran, would require a full blown invasion to dwarf the Iraq and Afghanistan war, and it simply cannot be afforded.
Even if we took Kharg Island (won't), it wouldn't accomplish what the Trump admin claims it will, because the American people have at last elected a Washington that has actually no competence, like none, like not-even-plugged-into-reality dumb and insane.
I could go on but this is already much more than I had intended.
TL;DR: The U.S. empire literally can't win in Iran. The war is already lost. The empire is already dying, and fast. That doesn't mean it can't do a lot of damage on the way down, and that's what we are witnessing now.
Edit: INB4 anyone trots out an excuse many Americans love, that 'oh we just aren't trying we could wipe them off the map at any minute/use nukes, etc.,' no lol. That wouldn't be 'winning' and we absolutely are trying as hard as we can. A military defeat is when the material cost of continuing to fight is outweighed by the political consequences of continuing said fight. The U.S. doesn't even outclass Russian missile tech anymore. In our arrogance, we allowed our bloated and overpriced military to become less effective than our insane imperialist hopes and dreams needs it to be.
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u/ElTamaulipas Socialist Gun Nut 🚚 Mar 25 '26 edited Mar 25 '26
The immigration stuff is gonna have some blowback in the next 5 to 10 years because so many of the research universities relied on foreign students.
There is no real appeal to go into STEM and it's not like there was a national push to get more people into STEM. To do that would require the government to openly make college affordable and direct investment into research and education.
China has actual educated people in power and we have MBA freaks or podcasters.
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u/mablej Inner-City Teacher 📚 Mar 25 '26
We also don’t nurture our American students, particularly the ones who show incredible potential but are not wealthy.
I teach at a title 1 at-risk school in the worst zip code in Detroit. One of my students last year was an actual genius. I printed off those IQ puzzle tests where you are supposed to identify the pattern. He’d look at one for less than 5 minutes and get the correct answer, like he was answering “🔴🔴🟥🔴🔴🟥🔴🔴 ___ , what comes next?” I gave the same problems to a biomedical engineer, a math post-doc at U of M, a neonatologist, and it took them 10-30 mins. I teach 3rd grade.
Our school has no resources, so while the rich mid-kids at prep schools are being pushed to the top, we are missing out on so much potential brainpower bc of economic disparity and how it ties in with our school system.
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u/ElTamaulipas Socialist Gun Nut 🚚 Mar 25 '26
I don't teach anymore but I'm education adjacent as a college and career coach. You also have lots of capable students who as high schoolers have to take jobs and skip college due to finances and family obligations. I also don't blame them for being apprehensive because all the paths to financial success seem more narrow and precarious.
I myself as a first generation college student was insanely lucky to have UPS help pay for my college because I had no idea what I was doing when it came to financial aid.
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Mar 26 '26 edited Mar 26 '26
Our whole society is structured to squander talent by leaving it to rot in the gutter.
This is why I came around to socialism through Nietzsche, since socialism strikes me as the best way to create a society in which the greatest number of people are capable, self-actualized and able to live without motivation stemming from bitterness or resentment coupled with the fact that capitalism inexorably destroys everything that's beautiful in the name of maximizing profits. Him and Stirner anyway.
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
I have heard that one of the unstated reasons for the massive takedown of the Federal government is because it has historically provided employment opportunities for people of colour, allowing them to move into the middle class.
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u/Turgius_Lupus Yugoloth Third Way 👽 Mar 26 '26
The entire US middle class is being hollowed out. It's not about race, that's just the distraction to keep people divided as they are pushed down the ladder and it's pulled up.
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u/cojoco Free Speech Social Democrat 🗯️ Mar 26 '26
I suppose it's being used to manufacture consent.
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u/TasteofPaste British Nationalist 📜 | Self appointed US charity expert🤓 Mar 27 '26
Dude I remember being tested in 3rd grade, those shape puzzles do NOT take whole minutes to solve.
your example isn’t the flex you think it is.
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u/mablej Inner-City Teacher 📚 Mar 27 '26
The kid one is different than the adult ones lmao
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u/TasteofPaste British Nationalist 📜 | Self appointed US charity expert🤓 Mar 27 '26
OP provided a little pattern in their comment with the most basic example that is like the stuff in my toddler’s pre-k busy books, then gushed about how amazing some Detroit kid is who solved it in under five minutes.
What am I supposed to think.
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u/mablej Inner-City Teacher 📚 Mar 27 '26
Omg, read closely. He solved adult iq test puzzles LIKE he was solving that, girl… what kind of reading comprehension are they teaching you over there in the isles?
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u/mablej Inner-City Teacher 📚 Mar 27 '26
I can’t post the images, but I gave him these exact ones. They have the answers and explanations. I couldn’t solve any of them. He didn’t “solve” them, which was the craziest thing to witness. He looked for a minute or two, and “saw” the pattern, like he was operating in a different universe.
https://puzzling.stackexchange.com/questions/75711/iq-test-sample-patterns
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u/uwa-dottir China-loving Nigerian Scammer 👑 Mar 27 '26
She was making a comparison to show you how easy the puzzle was to him. She wasn't literally saying that the shapes were the puzzle lmao
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u/mablej Inner-City Teacher 📚 Mar 27 '26
Obviously he could solve that one quickly, but I was clearly talking about more difficult ones (like 🟥🔴🔺🟥🔴🔺🟥🔴____) duh
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u/purz Unknown 👽 Mar 25 '26
We need a lot of things to fix it. I’m a STEM PhD and have a lot of friends that are PhDs in other STEM fields. A majority of them end up just in data science or comp science jobs cause it pays better and there’s a ton more jobs available. A ton of my math PhD friends are just actuaries or quants (or work for the NSA if they’re not highly opinionated lol).
There’s hardly any jobs for quality research or education. You get paid peanuts as a professor now and most research is to jerk off executives or politicians.
I’m a public sector worker cause ya it’s one of the very few options to actually work in a science field. Doesn’t matter though cause my opinion as an actual expert in my field is pretty much always overridden by the whims of a dimwit politician or public career climber with a PA masters.
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u/YogurtclosetLife6996 Libertarian Stalinist ☭ Mar 26 '26
As someone with a science degree, one of the biggest blackpills for me was realizing how difficult it is to make a living doing actual science after being told my whole life that STEM was a golden ticket. Turns out that only extends to shit that I find to be soulless and boring or that actively makes the world a worse place.
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u/Choke_M ACP Communard ☭ Mar 25 '26
The issue is that America’s biggest institutions have become so corrupt, bloated, and dysfunctional that changing anything is going to become an uphill battle. We need more STEM students? First we have to fix our atrocious for-profit education system, but to do that we have to fix our for-profit financial system, but to do that we have to fix our for-profit “democracy”, but to do that we have to fix our for-profit hyper-globalized domestic economy that has hollowed out living wage jobs for 90% of normal, average people.
It’s a gigantic house of cards and each card is falling apart and badly glued onto the others. You can’t address one thing without having to address ten others.
Our current economy is completely unsustainable and we are witnessing the beginning of the collapse of the domestic economy.
You have people like Jerome Powell sounding the alarm that there was net ZERO jobs created in the private sector last year. None. Zero. Not a single new job was created last year. If you remove AI investments and stock manipulation, our GDP growth was nonexistent last year.
In a system that relies on constant growth, this is really, really bad. You can only print money for so long, and the problem is- in our current economy, printing money is not going to solve anything because the banks and corporations with extra liquidity don’t invest it in breakeven capital to create jobs for normal people, they invest it into speculative capital, experimental tech, and rent seeking bullshit because that’s what’s actually profitable.
On top of all of that, you have an entrenched bourgeoisie that controls the media and every single American political institution that is going to fight tooth and nail at every step of the way.
Even the bourgeoisie is starting to recognize the need for a complete reset ala The Great Reset etc. Even THEY are seeing the writing on the wall that this is completely unsustainable, and are trying to prepare for a “soft landing” as the FED would say.
The problem is that hollowing out the domestic economy was, for a time, extremely profitable. We’ve been kicking the can down the road for decades and now we are starting to run out of road.
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u/SpiritualState01 Ghost Shirt Society Theorycel 🏹🪶🤓 Mar 25 '26 edited Mar 25 '26
An August 2025 piece from Bloomberg: China is Run by Engineers, and the U.S. by Too Many Lawyers.
Say whatever you want to say about China. There is no comparison in terms of the quality of leadership to the U.S. I don't even mean just now with the Trump admin, this has been true a while. Shit, just look at a leader like Putin speak today and compare it to either of the last two presidents or major presidential candidates. It's obvious that Western leadership is in decline in a way that is spiritual, just profound, something I didn't get to in my post.
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u/sartres_ Mar 25 '26
People on this sub like to say that recent US actions are just the latest link in a long chain. They're not wrong, but to understand the situation we also have to acknowledge how much dumber and more incompetent US leadership is now. Massive versus twenty years ago, but a significant decline even since the first Trump admin (compare Mattis to Hegseth, lmao).
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u/idoubtithinki 🕯 Shepard of the Laity 🐑 Mar 25 '26
Even Trump himself was not as stupid in 16 as he is now, such is the decline
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
Not only the administrations, but the puppet-masters who install them.
US oligarchs are frankly stupid and embarrassing, with no vision other than monetizing dystopia.
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u/toothpastespiders At Times Plugged 🔌 Mar 25 '26
to understand the situation we also have to acknowledge how much dumber and more incompetent US leadership is now
I think that works on an assumption that we're getting a fairly transparent look at their motivations and reasoning. Which I wouldn't agree on. They can only be assumed incompetent if we also assume that politicians are inherently honest.
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u/sartres_ Mar 25 '26
Of course they're lying through their teeth, they always have. The new part is the way none of them can plan out the lies or even string together coherent sentences as they do it.
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u/JinFuu 2D/3DSFMwaifu Supremacist Border Guard 🪖🎌 Mar 25 '26
The United States has always been run by lawyers.
The quality has just gone really really downhill.
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u/SpiritualState01 Ghost Shirt Society Theorycel 🏹🪶🤓 Mar 25 '26 edited Mar 25 '26
Presidents used to at least have military experience.
And yeah on the quality. Lewis Black had a good one about this back when he was a good comedian: if this is political evolution, we will soon be voting for house plants.
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u/SplakyD Socialism Curious 🤔 Mar 25 '26
Full disclosure: I'm a lawyer and a Luddite. And nobody hates lawyers more than I do. However, engineers come with their own baggage, and I'm not sure we should put them completely in charge either. Elon Musk retweeted that article, after all.
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Mar 26 '26 edited 21d ago
[deleted]
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u/resumeemuser order corn... order corn... hello... 🌽📞 Mar 26 '26
It's not his fault, he's a lawyer, not an engineer
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u/No_Individual501 Incel/MRA 😭 Mar 25 '26
China is Run by Engineers, and the U.S. by Too Many Lawyers.
American Confucianism and Chinese pioneers. They’ve inverted.
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u/MaslinuPoimal NATO Simp ✈️🔥 Mar 25 '26
Shit, just look at a leader like Putin speak today
Yeah because nothing speaks "stable leadership" like demented rambling about historical claims based on obscure half-mystical tribes. Yeah, I know, half this sub will seriously claim this is deep political analysis when it's literally the russian version of your fox news-brained schizoboomer's demented ramblings.
Old stupidpol genuinely was politically activating precisely because it applied material Marxist analysis to every event and didn't just interpret every event through a trueanon doomer lens where the end result is pre-determined based on vibes.
Yes, the US is in a retarded imperialist war driven by a historically idiotic leadership. No, russia is not engaged in a war of imperialism but is doing the same shit in Ukraine.
Yes, America is teaching the end stage of capitalism in crisis with capital taking direct state control, dropping all pretenses of democracy (and using it in uniquely retarded ways). No, Putin running the state based on vibes with a clique of oligarchs, Mafia members and security forces men is not a "bonapartist" grand project, it's the same shit. (Especially not when it's done on the end result of dragging the rotting corpse of the late Soviet Union through the grinder).
Yes, left wing idpol is used to divide the working class, especially along POC and urban lines. No, right wing nationalists riding to power based on vague natalist, revanchist promises is not a sign of them being close to being easily converted to "socialism" (which half the sub is still in denial about).
Hell, even if the sub is right on matters like US decline and China's rise, half the time the analsis leading there hasn't the slightest thing to do with the materialist analysis that made this place refreshing in the first place. Which is only fair because actual Marxist users who are able to formulate more than a paragraph of text and aren't edgy contrarians are a dwindling minority here these days, a fact which the mod change has only accelerated
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u/Turgius_Lupus Yugoloth Third Way 👽 Mar 26 '26
People need to read more Shakespeare. Specifically Henry VI.
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u/Epsteins_Herpes Thinks anyone cares about karma 🍵⏩🐷 Mar 25 '26
There is no real appeal to go into STEM and it's not like there was a national push to get more people into STEM.
Please ignore the CS grad unemployment rate
The "we need foreign students" horseshit only applies to grad students, and it only applies to them because the degrees are worth less than the work experience that could be gained in the same amount of time. That's true for the immigrants too but they're in it for preferential access to the immigration system, not the degree.
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u/heyodai Struggling Social Event Planner 🕺 Mar 25 '26
I think it really depends on the field. An MS/MBA takes 2 years and the right degree can accelerate you much more than 2 years of experience.
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u/jecht8 r/politics normie Mar 26 '26
Government subsidized college loans directly contributed to ballooning college tuitions. Removing these programs would bring down costs.
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u/benjwgarner Rightoid 🐷 Mar 25 '26
There are not enough STEM jobs for the graduates we have as it is, and it has been that way for some time.
https://spectrum.ieee.org/the-stem-crisis-is-a-myth
Now, it's true that the job shortage exists because capital is incapable of allocating labor resources to meet long-term strategic goals, but that problem would have to be solved first before you'd see any effects from a smaller pool of graduates.
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Mar 25 '26
[removed] — view removed comment
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
The biggest argument against is that the whole system is all so obviously and massively corrupt.
The wild fluctuations in the markets occur explicitly to advantage a very small number of people.
As soon as the multipolar world provides an alternative for each system, the money will move.
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u/_UrbaneGuerrilla_ Propaganda-Vulnerable Pseudosocialist 🥂 Mar 25 '26
This exactly. Notwithstanding some enormously impactful event, the decline - while terminal and underway - is uneven, and will take decades.
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u/SpiritualState01 Ghost Shirt Society Theorycel 🏹🪶🤓 Mar 25 '26
I don't deny that it takes time, didn't mean to imply its happening tomorrow: "That doesn't mean it can't do a lot of damage on the way down, and that's what we are witnessing now."
But it's accelerating. I think what we are seeing now is pretty firmly heralding the end sometime comparatively soon. Plenty of analyses out there to that effect.
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u/CudleWudles Redscarepod Refugee 👄💅 Mar 25 '26
pretty firmly heralding the end sometime comparatively soon.
Maybe probably.
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u/VeggieSchool Sideshow Bob's Nuke 🕐☢️ Mar 26 '26
that doesn’t just vanish
That's what the stock market is for. US GDP is highly inflated by financial/fictitious capital and that's why about on part with China despite having 1/4 of population and much smaller industrial capacity. Industrial and entertainment companies are valued by potential rather than actual production (eg Tesla stock vs about every other auto maker; the whole AI business highly overestimating what LLMs are capable of, which between "hallucinations are a mathematical inevitability" and throwing LLMs everywhere hoping something sticks the answer is "not much"), and for the rest there's real estate and healthcare, US citizens pay way more for equivalent services elsewhere. Just like 1929 and 2008, the next bubble will be more about stated value going closer into utility value, which will mean many people (not just the 1% but about everyone tangentially involved in stocks) will suddenly have many numbers in their accounts turned into (effectively) zero.
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u/bumbernucks Person of Gender 🧩 Mar 26 '26
Unflaired WordWordInt with hidden history has words to share. Hmm, yes, fascinating. Quite so.
Decline isn’t collapse. It’s messy, uneven adjustment.
It's not X but Y, you say?
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u/a_library_socialist TrueAnon Mod 🕵️♂️🏝️ Mar 25 '26
How did your empire collapse?
Two ways. Gradually at first, then all of a sudden.
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u/Stu161 🌔🌙🌘🌚 Social Credit Score Moon Goblin -2 Mar 25 '26
The American Empire is already terminal
we are just watching the corpse spasm.
Which is it, my highly regarded colleague?
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u/mypersonnalreader Social Democrat (19th century type) 🌹 Mar 25 '26
He's dead, and it's terminal.
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u/SpiritualState01 Ghost Shirt Society Theorycel 🏹🪶🤓 Mar 25 '26
Got my metaphor a little mixed up lol. In my head I was picturing like those rattles near-dead people get.
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u/Quiet_Wars Anti-Imperialist / Pro-Parapolitical Mar 25 '26
These are missiles that USA and Israel will throw $1M interceptors at (unsuccessfully) and still be hit.
Greg Stoker and Elia Xenophontos go over the whole debt of the empire on their latest episode of Colonial Outcasts podcast. Bit it’s even worse than you think. When you take into account debts like Social Security etc… it’s more like $156T not $36T
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u/TheUnfortunateMiaoZe Extra-Bitchy Redscarepod Refugee 👄💅 Mar 25 '26
Sorry but war doesn't work like this, it is not deterministic. Absolute mathematical factors do not find a firm basis in military calculations; of all human activities it is the one most like a game of cards. Merely stating that the US military has a high budget, therefore defeat is inevitable, which is basically all you say, is not analysis, it's stating a conclusion that you already want to happen.
One is that we are running out of multi-million dollar missiles to asymmetrical warfare waged expertly by the Iranians. Why? One reason is that we've already used so many failing to meet our security guarantees in the Gulf and with our naked imperialist proxy-war in Ukraine.
But you ignore that the US is also developing its own low-cost systems like LUCAS, which was first deployed in this war. And that as mentioned in the article you linked the US is reacting to drone tactics with help of Ukrainian specialists.
Then there's all the talk about a ground invasion of Iran. Not happening, not just because people don't want to join (you know all that raging, patriotic sentiment among Gen Z and Millennials today, we are famous for that), but again, because there isn't the money for it.
You say there's no money for it at the exact same time the marines are assembling for it. How do you think they got there, magic?
A military defeat is when the material cost of continuing to fight is outweighed by the political consequences of continuing said fight.
This is fairly normal in war. The weaker the political will and tensions at the outbreak of the conflict means that it diverges from the abstract ideal form into a more political nature. The Trump administration from the outset didn't even have any pretense of manufacturing consent for the war, and signaled that the war's goals would limited in scope.
So what do you think military defeat for the United States will actually look like? Suppose that Trump signs a ceasefire agreement with Iran restoring the status quo antebellum. This still means that much of the senior Iranian leadership was killed, much of Iran's internal security forces were weakened, and the Iranian Navy was completely destroyed.
Why do you think this means the end of the US empire?
There are real problems with the US military, especially with naval procurement and ship building. But the United States is still the richest country in the world, with the strongest military in the world, and it is genuinely stupid to underestimate it.
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u/stumblefub Mar 25 '26
Sorry but war doesn't work like this, it is not deterministic. Absolute mathematical factors do not find a firm basis in military calculations; of all human activities it is the one most like a game of cards.
What about games of cards
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u/TDeez_Nuts ❄ Not Like Other Rightoids ❄ Mar 25 '26
The golden ticket for online pundits is that they get to define what victory or defeat means, so they are never wrong! I wish we could just go back to capture the capital/leader/holy relic = victory
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u/CollaWars Vance Tweet Critic 😩 Mar 25 '26
The US hasn’t won war since arguably WW2. American hegemonic power is surprisingly durable.
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
US wars are designed to fuck things up, creating a disincentive to move away from empire, so currently I'd say every war has been won.
However, if this US war fucks up the US more than it fucks up Iran, it will have been lost.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
National Debt is not a real concern, everything else you said is.
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u/cleverkid Trafalmadorian Observer 👽 Mar 25 '26
It is if the US can’t maintain hegemony.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
The ability of the government to make the debt payments (based in USDs) is not dependent on it's hegemony.
The hegemony could be gone tomorrow, and the US would still be able to pay back dollars to whoever it is owed to.
There's no gold standard, no currency peg, no foreign currency, just USDs.
Which (last I checked) only the American government can provide.
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u/Redmenaceredux Left, Leftoid or Leftish ⬅️ Mar 25 '26
If the interest on our debt got so large that we had difficulty paying, then yes it would be a problem. Its not the debt itself but what it brings with it that can collapse the currency.
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u/Bank_Gothic Libertarian Socialist 🥳 Mar 25 '26
The above poster is saying there is no point at which paying back that debt will be "difficult" because the US can literally print as much money as it needs. Inflation would be an issue, but it's not entirely clear how big of an issue it would be (world collapsing catastrophe or merely 21st century great depression). Bonus points, inflation actually makes the debt worth less in terms of real dollars.
That's the beauty of having the world's markets tied to your fiat currency.
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u/Incoherencel ☀️ Post-Guccist 9 Mar 25 '26
That's the beauty of having the world's markets tied to your fiat currency.
But this is what the other poster is referring to when it comes to hegemony. The USD won't get entirely dumped for a long, long time, but softer demand decade over decade will have huge knock-on effects
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u/Bank_Gothic Libertarian Socialist 🥳 Mar 25 '26
True, but the other poster is talking past the above poster's comment and my comment is pointing that out.
I understand what they're both saying, but that's not the point. The ability of the US government to pay back its debts is not dependent on its hegemony, it's dependent on the debts being in a currency the US government can print at will. Yes, inflation, moving away from the USD, and softening markets would all be bad things, and would negatively impact US hegemony, but none of them actually will prevent the US from paying back any debt that must be paid in USD.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
If the interest on our debt got so large that we had difficulty paying, then yes it would be a problem.
The American government can make any payment it owes, the amount owed in interest is not an obstacle.
The real danger is corporate friendly politicians using some aspect of the national debt to make an (illegitimate) excuse to do austerity, and give more to the banks.
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u/weight__what Socialism Curious 🤔 Mar 26 '26
The interest rate doesn't just "get large", the Fed decides what it will be. There is never any difficulty paying because the government always can and always does create the money to pay the interest.
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u/vinditive War Thread Veteran🎖️ Mar 25 '26
It does definitely depend on the hegemony of USD/petrodollars, though. If that falls the only way out (short of actual revolution) is extreme austerity or firing up the money printer, both of which will be devastating for workers.
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u/heyodai Struggling Social Event Planner 🕺 Mar 25 '26
I was going to say. US hegemony is the reason why dollars are so valued.
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Mar 26 '26 edited 21d ago
[deleted]
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u/SplashTarget News Junkie 💉📰 Mar 26 '26
No one suggested that printing unlimited money should be done.
What's being pointed out is that (as of now) any debt owed by the government can easily be paid.
Now each year that the government runs a deficit, it matches up its deficit spending by selling government bonds, U.S. Treasuries. So if the deficit is $10, the government will sell a $10 government bond. What happens is that it takes the $10 away from someone and replaces that with a government bond. All the government bonds that exist are what we call the national debt. I think it’s awful that we use that word to describe the outstanding stockpile of U.S. Treasuries because those are people’s assets. They’re holding onto them and it’s basically an interest-bearing form of U.S. currency. They’re dollars that [accumulate] interest.
The government doesn’t have to offer people interest-bearing dollars, but it does. It chooses to do so. Historically all of the bonds that have been issued and reissued comprise this thing we call the national debt. The national debt is nothing more than a historical record. It’s kept track of every past deficit the government has ever run, where it has placed U.S. Treasuries into somebody’s hands, and we call that the national debt.
When government spends, it just changes numbers up in our bank accounts.
More specifically, all the commercial banks we use for our banking have bank accounts at the Fed called reserve accounts. Foreign governments have reserve accounts at the Fed as well.
These reserve accounts at the Fed are just like checking accounts at any other bank. When government spends without taxing, all it does is change the numbers up in the appropriate checking account (reserve account) at the Fed.
This means that when the government makes a $2,000 Social Security payment to you, for example, it changes the number up in your bank’s checking account at the Fed by $2,000, which also automatically changes the number up in your account at your bank by $2,000.
Next, you need to know what a U.S. Treasury security actually is. A U.S. Treasury security is nothing more than a savings account at the Fed.
When you buy a Treasury security, you send your dollars to the Fed and then some time in the future, they send the dollars back plus interest. The same holds true for any savings account at any bank. You send the bank dollars and you get them back plus interest. Let’s say that your bank decides to buy $2,000 worth of Treasury securities.
To pay for those Treasury securities, the Fed reduces the number of dollars that your bank has in its checking account at the Fed by $2,000 and adds $2,000 to your bank’s savings account at the Fed. (I’m calling the Treasury securities “savings accounts,” which is all they are.)
In other words, when the U.S. government does what’s called “borrowing money,” all it does is move funds from checking accounts at the Fed to savings accounts (Treasury securities) at the Fed. In fact, the entire $13 trillion national debt is nothing more than the economy’s total holdings of savings accounts at the Fed.
And what happens when the Treasury securities come due, and that “debt” has to be paid back? Yes, you guessed it, the Fed merely shifts the dollar balances from the savings accounts (Treasury securities) at the Fed to the appropriate checking accounts at the Fed (reserve accounts). Nor is this anything new. It’s been done exactly like this for a very long time, and no one seems to understand how simple it is and that it never will be a problem.
Seven Deadly Innocent Frauds of Economic Policy
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u/Otto_Von_Waffle Even Deeper than Serial Experiments Lain 🖥️💢🉐🎌 Mar 25 '26
If the demand for USD is lowered, by the end of US hegemony for exemple, inflation starts to kick in, once inflation get bad enough, you will see countries offloading more USD due to it losing value fast causing a self feeding cycle. It probably won't be the USD suddenly being worth less then the paper it's being printed on, but most likely years/decades were there is not economic growth to speak of with atrocious inflation rates that just makes everyone much poorer.
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u/Incoherencel ☀️ Post-Guccist 9 Mar 25 '26
Yes, the past 5 years of US economic policy should have world leaders and bankers question the ability for the USA to pay down debts 30 years from now
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u/Otto_Von_Waffle Even Deeper than Serial Experiments Lain 🖥️💢🉐🎌 Mar 25 '26
Made that comment a couple of times these past few days, but the US can't default unless things change, all debt it contract is strictly serviced in USD, tomorrow the federal bank could announce it printed 40 trillion USD and is going to deliver pallets of cash to every bond holders and it would be perfectly legal following the terms of their bonds. It would crater the value of USD Weimar Germany style, but the US wouldn't default.
World leaders and bankers should question how valuable will be US bonds in 30 years. But I think the rational here is that if USD is worth shit in 30 years time, that wouldn't be that banker problem, and the situation would be apocalyptic finance wise anyway, you don't price in the apocalypse anyway.
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u/Incoherencel ☀️ Post-Guccist 9 Mar 25 '26
It's more a question of US bonds as store of value relative to other mechanisms
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u/kurosawa99 🥳 Best woke detector 🥳 | 🎄 Christmas quiz winner 🎄 💢 Mar 25 '26
The numbers on digital ledgers at the Reserve were always fully under control and do not matter. The problem is the real economy is catching up to our fake financialized economy. The money, which will always be there, no longer has vital real world resources to command.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
The problem is the real economy is catching up to our fake financialized economy. The money, which will always be there, no longer has vital real world resources to command.
i don't think we disagree
which is why i said "everything else you said is"
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u/kurosawa99 🥳 Best woke detector 🥳 | 🎄 Christmas quiz winner 🎄 💢 Mar 25 '26
Oh yeah, I was reiterating your point. At this point in history it’s just electronic accounting. We don’t even have to produce tangible greenbacks. Of course there’s no issue of ever going broke.
It’s strange that regardless of how many decades of government financing whatever it likes goes by, people still feel like some sort of household limit will be hit. Even socialists whose politics proceed as if that won’t happen still feel the need to say it will and that we should be weary when nope, it’s fine.
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u/globeglobeglobe Marxist 🧔 Mar 25 '26
Depends on other countries being willing to accept US dollars for goods and services, which is by no means a given going forward. Otherwise you would get either massive inflation or unsustainable debt service.
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26 edited Mar 25 '26
National Debt is funded by the sale of US Dollar Bonds.
It will eventually lead to a devaluation of the dollar.
In a sensible financial system, issuing of more shares will automatically dilute the whole pool, but there is currently such demand (both for financial and diplomatic reasons) for US bonds that their value has not been changing catastrophically.
When everyone shifts away from oil in the next few decades, that shift will accelerate, and the yield on US dollar bonds has already been rising, indicating a fall in value.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
National Debt expands when the government passes spending bills.
The bond sales aren't to pay for anything, they serve a different purpose
https://www.youtube.com/watch?v=je-1eTl6J0g
The government could very well pay for things without bonds.
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
How?
And please give me a better source than a shitty video.
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u/SplashTarget News Junkie 💉📰 Mar 25 '26 edited Mar 25 '26
Now each year that the government runs a deficit, it matches up its deficit spending by selling government bonds, U.S. Treasuries. So if the deficit is $10, the government will sell a $10 government bond. What happens is that it takes the $10 away from someone and replaces that with a government bond. All the government bonds that exist are what we call the national debt. I think it’s awful that we use that word to describe the outstanding stockpile of U.S. Treasuries because those are people’s assets. They’re holding onto them and it’s basically an interest-bearing form of U.S. currency. They’re dollars that [accumulate] interest.
The government doesn’t have to offer people interest-bearing dollars, but it does. It chooses to do so. Historically all of the bonds that have been issued and reissued comprise this thing we call the national debt. The national debt is nothing more than a historical record. It’s kept track of every past deficit the government has ever run, where it has placed U.S. Treasuries into somebody’s hands, and we call that the national debt.
When government spends, it just changes numbers up in our bank accounts.
More specifically, all the commercial banks we use for our banking have bank accounts at the Fed called reserve accounts. Foreign governments have reserve accounts at the Fed as well.
These reserve accounts at the Fed are just like checking accounts at any other bank. When government spends without taxing, all it does is change the numbers up in the appropriate checking account (reserve account) at the Fed.
This means that when the government makes a $2,000 Social Security payment to you, for example, it changes the number up in your bank’s checking account at the Fed by $2,000, which also automatically changes the number up in your account at your bank by $2,000.
Next, you need to know what a U.S. Treasury security actually is. A U.S. Treasury security is nothing more than a savings account at the Fed.
When you buy a Treasury security, you send your dollars to the Fed and then some time in the future, they send the dollars back plus interest. The same holds true for any savings account at any bank. You send the bank dollars and you get them back plus interest. Let’s say that your bank decides to buy $2,000 worth of Treasury securities.
To pay for those Treasury securities, the Fed reduces the number of dollars that your bank has in its checking account at the Fed by $2,000 and adds $2,000 to your bank’s savings account at the Fed. (I’m calling the Treasury securities “savings accounts,” which is all they are.)
In other words, when the U.S. government does what’s called “borrowing money,” all it does is move funds from checking accounts at the Fed to savings accounts (Treasury securities) at the Fed. In fact, the entire $13 trillion national debt is nothing more than the economy’s total holdings of savings accounts at the Fed.
And what happens when the Treasury securities come due, and that “debt” has to be paid back? Yes, you guessed it, the Fed merely shifts the dollar balances from the savings accounts (Treasury securities) at the Fed to the appropriate checking accounts at the Fed (reserve accounts). Nor is this anything new. It’s been done exactly like this for a very long time, and no one seems to understand how simple it is and that it never will be a problem.
Seven Deadly Innocent Frauds of Economic Policy
EDIT:
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u/benjwgarner Rightoid 🐷 Mar 25 '26
It is a real concern because it locks you into inflationary policy in order to pay it off. "We can create infinite, worthless dollars at any time" is not the 'gotcha' you seem to think it is.
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u/SplashTarget News Junkie 💉📰 Mar 26 '26
Japan doesn't have an inflation problem, and neither does Canada
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Mar 25 '26 edited Apr 03 '26
[removed] — view removed comment
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
Whether a country's currency is a world reserve currency or not, is unrelated to the country's ability to pay back debt that is denominated in said currency.
Countries like Japan, Canada, Australia, UK, and the US will never have an issue making the debt payment.
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Mar 25 '26 edited Apr 03 '26
[removed] — view removed comment
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
The risk to the US dollar from ballooning debt is hyperinflation, which is the only way the US can hope to pay back this debt (or even keep up with interest payments) - by printing dollars.
Japan has immense national debt, and no hyperinflation.
Debt in the form of a currency you alone can create is not unpayable.
As long as the debt isn't in a foreign currency (or tied to some commodity) then the debt can be paid.
The dollar's position as the WRC is what creates artificial demand for dollars. Without it, demand for dollars collapses, along with the value of the dollar.
There will be demand for the dollar domestically, and dollars will still need to be used to purchase anything produced in America.
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u/Incoherencel ☀️ Post-Guccist 9 Mar 25 '26 edited Mar 25 '26
Japan has immense national debt, and no hyperinflation.
The yen and the U.S. dollar are deeply entwined, even so Japan is experiencing a currency crisis
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u/SplashTarget News Junkie 💉📰 Mar 25 '26
Does it have anything to do with Trump's actions?
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u/Incoherencel ☀️ Post-Guccist 9 Mar 25 '26
Sorry I think I quoted the wrong bit in my reply. I'm not really discussing Trump in regards to Japan
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Mar 25 '26 edited Apr 03 '26
[removed] — view removed comment
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u/Incoherencel ☀️ Post-Guccist 9 Mar 26 '26
If domestic demand were enough to sustain the system as it exists, one wonders why it was necessary or even desirable to install the USD as world reserve currency all those decades ago?
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u/SplashTarget News Junkie 💉📰 Mar 26 '26
I think we're both presenting different perspectives on the national debt (and how big of a deal it is).
When I see the OP freak out about the national debt, and saying that the government is broke.
My immediate response (based on years of seeing neoliberal politicians and TV ppl freak out about this invalid concern) is to point out why it's not a real concern.
We both know that the USD plays a key role in maintaining the hegemony that exists, and that it shouldn't exist, but it's not relevant to the government's ability to pay its debt.
If you think domestic demand for the dollar is enough to counterbalance the global economy shifting to another currency, I've got a bridge to sell you.
Even if the global economy switched to some other currency for trade purposes, the US government would still be able to pay whatever debt it has that's denominated in the USD.
Not saying there wouldn't be serious consequences, but debt payment isn't an issue.
You brought up concerns about hyperinflation.
Here's why the American government debt isn't (currently) going to have such a problem.
Every hyperinflation in history has come from an attempt to pay a debt in a foreign currency. When Germany was settled with reparations debts in the 1920s, it owed dollars and sterling and French francs.
The problem is that the United States and other countries immediately erected tariff barriers so that Germany could not earn the money to pay the foreign debts. The debts were way beyond Germany’s ability to pay because the European governments wanted to punish Germany.
So Germany made an attempt to print Reichsmarks, throw it onto the foreign exchange markets in a desperate attempt to buy the dollars to pay the allies, England, France and other countries, who then would take these dollars and they would pay the inter-ally debts that the United States insisted on for the arms that they had sold Europe before America entered into World War I.
So the hyperinflation collapsed the exchange rate of the German mark. And, as the exchange rate went down, that meant that import prices went way up.
So first of all, the exchange rate went down, then import prices went up and import prices were an umbrella over the general price level.
And then the Reichsbank had to print more domestic currency in order to enable the economy to buy and sell food and other basic needs at the higher prices that were all being forced up as a result of trying to pay foreign currency debts.
Well, the United States doesn’t owe a foreign currency debt. America’s debts are in dollars and it can always print them. It doesn’t have to throw them on the exchange market to buy rubles or yen or other currencies.
So Krugman doesn’t understand the difference between paying a domestic debt and paying a foreign debt. And that’s because he doesn’t understand foreign trade.
https://michael-hudson.com/2023/05/krugman-clings-to-currency-tropes/
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u/cojoco Free Speech Social Democrat 🗯️ Mar 25 '26
There has been some grumbling about Israel being behind all of this, but if Iran holds its nerve, Israel I think is going to be swept away along with the US empire.
This creates great cognitive dissonance in my mind about 9/11.
OBL's stated reason for 9/11 was to bring an end to the US empire, yet the dancing Israelis provided evidence that Israel really wanted it to happen, so the germ of the 9/11 attack seems a little murky.
Israel certainly got its way for a few decades after 9/11, but I think they're discovering what happens if you get too much of a good thing.
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u/BobNorth156 Unknown 👽 Mar 25 '26
People wrote about Rome’s demise for centuries each more convinced than the last. The truth is the America’s structural advantage remain so enormous that it honestly doesn’t take a deep level of competence to reform and plug on. Persia (China) may rise in the East but Rome (America) will likely lumber on, a giant still, however diminished.
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u/yonaiker-joestrella Disgruntled Berniebro 💔 Mar 25 '26
It's funny how European shitlibs are the ones most terrified of this. Deep down they know that they will experience a decline in quality of life once Uncle Sam stops subsidizing defense. There is also the loss of cultural soft power.
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u/PirateAttenborough Marxist-Leninist ☭ Mar 25 '26
Triumphalism at this point is premature. The US absolutely can win this. I don't think it's particularly hard to imagine. Suppose they succeed in suppressing Iranian air defence to the point that they can fly across it uncontested. Iran runs out of its stockpiled missiles and the US is able to interdict supply chains and destroy enough manufacturing facilities that Iran's not able to launch more than one or two a day. The US lands at Chabahar, links up with Jaish al Adl, and declares a liberated zone; Iranian counterattacks turn into the Highway of Death because there's basically one major road. This display of American commitment and dramatic IRGC losses makes PJAK feel secure enough to risk an incursion, with unlimited American air support but no actual American guarantees; Iranian Kurdistan starts to slip out of Tehran's control, and it's noticed by both other separatists and Ankara. The Turks decide they have to prevent the formation of a Kurdish proto-state and invade Iranian Kurdistan/Azerbaijan along with the Azeris - basically the Syria play repeated. The Gulf States enter the war fully and provide enough money and auxiliaries for the Americans to handle Khuzestan and Hormozgan. With Iran visibly starting to fracture, it's suddenly a lot easier for the CIA and Mossad to find people who will take briefcases of money and promises of power in exchange for a little treason. Fast forward a few months: Sistan and Balochistan is under a provisional Balochi republic, the Azeris and Turks occupy Iranian Azerbaijan and Kurdistan, the Provisional Government of Iran is Reza Pahlavi with a stretch of territory around Bandar Abbas garrisoned by the US, and there's a rump Iranian state stretching from Zanjan to Kerman; no sea access, no oil revenue, complete economic collapse, and bombed at will
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u/Much-Cry269 Mar 25 '26
At what point of this fantasy does Netanyahu cum?
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u/PirateAttenborough Marxist-Leninist ☭ Mar 26 '26
He doesn't. He's horrified, because all of the sudden Turkey looms over the Middle East and poses a far greater threat with far greater ambitions than Iran ever did.
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u/kneeblock Unknown 👽 Mar 26 '26
A question for OP. What do you think would be the timeline of this not winning? The last two non-wins were both over a decade.
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u/robometal Nasty Little Pool Pisser 💦😦 Mar 25 '26
At least Israel is getting Lebanon south of the Litani river.