U.S. Debt Ceiling Debate: Struggle of the Financially Privileged

By Stewart Smith

The debate of the debt ceiling between the Republicans and the Democrats over the limit to the amount of debt the government can rack up is becoming as interesting as a WWE wrestling match. Treasury Secretary Geithner pondered over the disastrous consequences of failing to increase the debt ceiling, but is it at all believable? As the common Americans chew their finger nails into nubs, waiting to hear their fate, consumerism started to rear its head once again.

History has witnessed the rise of USA, blindly depending on the country’s industrial production. British Empire supported the South during the Civil War because they desperately tried to keep their fleeting colonies as poor agrarian countries supplying raw materials. However, nothing last forever and with passage of time, industrialists overpowered the agrarians and started providing tremendous growth of wealth and power to their country.

For the last 50 years the scene has changed dramatically. We had witnessed the rise and fall of dominant forces like Soviet Union and Nazi Germany, headed by a small group of people who perceived themselves as "the elite" and attempted to rule the whole world by force. The turning point was certainly the World War II which clearly deomonstrated that "the elite" can no longer assert control over the world by surpressing the people.

However, soon a new fatal weapon was developed which is more lethal than bureaucracy or diplomacy - fiat money.

Prior to the 1971 Nixon Shock, money was just a substitute for gold which can be exchanged across the border in dire need of goods and services. The new fiat currency system allows the privileged class to control wealth and financial streams. Dollar finally achieved the throne of the world’s top reserve currency, which has made United States and its industrial elite vulnerable to the financial elite.

Once producing real wealth became less profitable than manipulating financial flows, industrial elite started to gain power by partially merging with financial elites. Together, they form our current capitalistic corporate and market structure as we know it.

It is true that when you produce real products you need people to engineer them, build them, sell them and finally consumers to purchase them. But if you can extract profits from financial flows, you no longer need a large labor pool to participate in the process. This is the pivotal point where the rise of USA as an financial empire began, and the decline of America as "We The People" started.



(Infographic added by EconMatters via Business Insider by BankruptingAmerica.com.)

(Infographic added by EconMatters via Business Insider by BankruptingAmerica.com.)

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