Why the U.S. Debt Bubble
by Richard Freeman
At Last Had To Explode
Richard Freeman's thorough study of the root-cause of the accelerating decline of the U.S. economywhich appeared to begin suddenly and dramatically after election day, 2000including updated graphics of all phases of the U.S. internal debt bubble, appears in EIR for Sept. 28, 2001. This is its introduction.
It is being recognized more and more, that although the world economy itself could be revived, the present monetary and financial system cannot be saved.
Rescue would require uprooting the post-1971 monetary-financial system, which made the terminal collapse of the world's present system inevitable.
Driving forward the world financial-monetary system's collapse, are the convulsions of the bankrupt U.S. financial-monetary system, and here one of the most dangerous elements, is the inflated, still swelling, level of U.S. debt. A $31.5 trillion debt bubble towers over and imprisons the United States: $29.5 trillion in domestic debt, and at least $2 trillion in foreign debt, which has financed, in part, America's massive physical goods imports during the last decade.
American officials like to complain about the size of the Third World's foreign debt: The total of developing and emerging nation foreign debt is $3-3.5 trillion; but America's domestic and foreign debt is nearly ten times greater. By far, the American economy has created the largest and most dangerous debt bubble in world history.