First they will come for everyone’s savings, then they will use high interest rates to take everyone’s jobs.

The large deficits will allow the government to fund an expansion in relative terms, an expansion compared to what has arisen from the pandemic and lock-down economy. That expansion will cost trillions of dollars, most of it borrowed, and this debt will receive financing from the various economies that export to the U.S. as well as from the large banking institutions. They must fund an expansion in the U.S. in order to continue their exports or their loans to U.S. businesses. If the deficit does not find enough financing from these sources, they will have to offer a better return to the market, meaning inflation through a weakened dollar transferring more capital to those exporting countries and through inflation, rising prices that attempt to gather capital out of idle pools of savings. This inflation will reduce savings and lead to rising interest rates as banks demand their share of the higher earnings driven by higher prices. Inflation that extends beyond 2% for a long enough period will require a response from the Fed, raising interest rates further.

The end result will be a large debt that will need servicing, depressing the U.S. economy, a high rate of inflation threatening everyone’s savings as well as their wage increases, and rising interest rates further depressing the economy, leading to more mass closures of businesses already underway. Monopolies already control 70% of the US economy. The unemployment rate reached under the pandemic will have broken a ceiling, and the post-pandemic limited expansion will establish the higher rate as a floor. Any expansion will lead to a high demand for workers, leading to shortages and labor confrontations over wages. These confrontations will bring some gains to the workers, but this will reach a wall when confronted by the state over strikes with political demands and the general or national strike form of struggle. If the workers cannot climb this wall, then the capitalist state will still have a great imbalance to solve. The US government will have to reverse the flow of capital back from its creditors by using trade conflicts, the military and other forceful means as a way of fixing the price of the dollar or through the imposition of a command economy globally to influence the direction of physical capital back within the borders of the US.

Either solution, fixing the price of the dollar or the imposition of a global command economy, fits into the socialist economic analysis of the world economy. Socialism would replace the fixed dollar with a fixed global currency that must distribute currency equitably to every country and especially to the international working class. Socialism would also replace a command economy imposed by the Pentagon with its strategy of world conquest with a command economy based on a democratically-controlled strategy of a command economy for the world revolution. This would transfer all the most valuable assets, the most important means of productions, into common property administered by an elected world government. Only an international election can really spread democracy throughout the world, as it would actually guarantee every person, regardless of their location or legal status, a right to vote. Such an election, however, would need to ban the participation of oligarchs and their agents, nationalists playing to prejudices against other nations, and politicians associated with the political parties of the capitalist states. Such an election would not deny important talent to a new administration but rather free talent from its chains imposed by the demands of loyalty to a crumbling, unsustainable economic structure. It would not deprive American and European workers of their minimum standards but solidify them and prepare the rest of the world to quickly reach the same standard of living while restoring the balance between economic growth and environmental protections.