Debt: The First 5,000 Years

by David Graeber

In 2002, Argentina committed the ultimate sin: they defaulted—and got away with it. Subsequent U.S. military adventures were clearly meant to reestablish the nation’s symbolic, cosmological power—that is, to terrify and overawe (it didn’t really matter whom)—but in that respect do not appear to have been very successful: partly because they demonstrated that the U.S. military was unable to totally overcome far weaker rivals; partly, too, because, to finance them, the United States had to turn not just to its military clients, but increasingly to China, its chief remaining military rival. After the near-total collapse of the U.S. financial industry, which despite having been very nearly granted rights to make up money at will, still managed to end up with trillions in liabilities it could not pay, brought the world economy to a standstill, the U.S. lost even the ability to argue that debt imperialism guaranteed stability.

Important note! This was the argument I bought up just earlier. Even "occupied" countries were dumping their US debt, or getting away with defaulting on it. The US was becoming ever more dependent on China (again, second largest foreign holder of US public debt), which was becoming a major rival.