Showing posts with label THE USA AND THE WORLD SINCE PRESIDENT WILSON'S 14 POINTS (1918). Show all posts
Showing posts with label THE USA AND THE WORLD SINCE PRESIDENT WILSON'S 14 POINTS (1918). Show all posts
Monday, 5 February 2018
Wednesday, 24 January 2018
Sunday, 13 November 2016
The USA and the world, now and tomorrow...
To watch the TED talk by Ian Bremmer "How the US should use its superpower status...", click HERE!
Ian Bremmer, global research professor at New York University, teaches classes in the field of political risk. "G-Zero" (i.e. no G20 or G7) is a term used by Bremmer, and widely accepted by policymakers, for a global power vacuum in which no country is willing and able to set the international agenda...
Are we prepared to be a model country, one which the world will emulate? We need to change first! Another crisis (global financial crisis or economic depression or terrorist attack) could force us to change... We, individually, need to force our leaders to deal with the inequality in our country; this is urgent.
(Click HERE to watch a September 2018 interview of Prof. Bremmer!)
Ian Bremmer, global research professor at New York University, teaches classes in the field of political risk. "G-Zero" (i.e. no G20 or G7) is a term used by Bremmer, and widely accepted by policymakers, for a global power vacuum in which no country is willing and able to set the international agenda...
Summary of the TED talk by Ian
Bremmer:
Is the USA, “large and in charge”, still in fact the world’s “n°1”? We
are increasingly in a “driverless world” (i.e. the USA no longer “drives” the
world). Americanization and globalization were, up to now, the same thing (WTO,
IMF, World Bank, Bretton Woods Accord, etc., were “American” institutions).
US view: President Obama (USA) in charge of the world. The reality: US
now has little impact on G20; Putin, Xi Jinping, Angela Merkel, etc. are now “calling
the shots”. The problem is it's a G-Zero world that we now live in, i.e. a
world order where there is no single country or alliance that can meet the
challenges of global leadership.
Globalization is continuing. Goods and services and people and capital are moving across borders faster and
faster than ever before, but Americanisation is not.
What are the implications of the end of Americanisation for the whole
world, and what do we think about it in the United States?
Why are we in this situation? It’s because:
> the USA spent two trillion dollars on wars in Iraq and Afghanistan
that failed and we don't want to get involved in (expensive) wars anymore;
> large numbers of middle and working class Americans feel they've
not benefited from globalization, so they are rejecting it;
> we don't need OPEC or the Middle East because we now produce most
of our oil in the United States.
Americans don't want to be the global sheriff for security or the
architect of global trade any more. They don't even want to be the cheerleader
of global values.
Europe: transatlantic
relationship is now weaker than it has ever been (crises: Brexit, French vs
Russians, Germans vs Turks, Brits vs Chinese, etc.).
China: wants leadership only in economic sphere, hence competition with US.
Russia: wants more leadership (cf. Ukraine, Baltic States, Middle East),
hence competition with USA.
Middle East: now very unstable because US and allies no longer provide military
security, oil revenue has gone down, and populations are rebelling against
corrupt despots (hence failed states, terrorism, refugees, etc.). Will entire
Middle East fall apart? No, Kurds, Iraq, Israel, Iran will do well.
Russia: antagonized by US and Europe expanding NATO right up to its
borders; also threat from China which is going to dominate (economically) every
country around Russia.
Asia: political stability in most important economies (Modi in India, Abe
in Japan, Xi Jinping in China). Problems: South China Sea, Kim Jong Un. But most
leaders want to avoid xenophobia and escalation of geopolitical and
cross-border tensions because they want long-term economic stability and
growth.
Europe: suffering from refugee crisis (> Brexit, populism across all
of European states). In G-Zero world, Europe will get smaller (because Eastern
Europe and Turkey are too different from “core Europe” and NATO will be weaker
without US dominance). Germany and France and others will still function, but peripheral
countries (Greece, Turkey, others) will not.
Latin America: populism and opposition to USA > economic downturn. Hope
for Argentina, Cuba, Venezuela, Brazil? Not for Mexico (cf. Trump)…
Africa: in G-Zero world > extreme
segregation between winners and losers across Africa: the few countries that
are well-governed, urbanized, with entrepreneurship and women in workforce vs other
countries (with extreme climate, radicalism, poor governance, border wars,
forced migration, etc.).
United States: elections have highlighted loathing of Washington (the “establishment”),
the media and globalization. Americans now have to compete with the rest of the
world (it can easily). Protectionism and isolationism are not good options.
NAFTA is a good thing for USA. Terrorism and refugees are not as big a problem for
USA as for Europe or Middle East.
USA no longer wants to be global cop, architect of global trade, cheerleader
of global values. But, in G-Zero world, USA should lead by example. Clinton wants
to go back to the '90s (i.e. US dominating the world), Trump back to the '30s (i.e.
US rejecting the world). But, in G-Zero world, though the US will not be in economic decline, America will
no longer be able or willing to control the world.
Are we prepared to be a model country, one which the world will emulate? We need to change first! Another crisis (global financial crisis or economic depression or terrorist attack) could force us to change... We, individually, need to force our leaders to deal with the inequality in our country; this is urgent.
(Click HERE to watch a September 2018 interview of Prof. Bremmer!)
Wednesday, 24 August 2016
Wednesday, 10 December 2014
Monday, 24 November 2014
Why did the Cold War come to an end?
Document 1: Cartoon by Nicholas Garland published in the Daily Telegraph
in January 1986
Document 2: Extract of a speech given by Ronald Reagan in June 1987 in
Berlin
“And now the Soviets
themselves may, in a limited way, be coming to understand the importance of
freedom. We hear much from Moscow about a new policy of reform and openness.
Some political prisoners have been released. Certain foreign news broadcasts
are no longer being jammed. Some economic enterprises have been permitted to
operate with greater freedom from state control.
Are these
the beginnings of profound changes in the Soviet state? Or are they token
gestures, intended to raise false hopes in the West, or to strengthen the
Soviet system without changing it? We welcome change and openness; for we
believe that freedom and security go together, that the advance of human
liberty can only strengthen the cause of world peace. There is one sign the
Soviets can make that would be unmistakable, that would advance dramatically
the cause of freedom and peace."
Friday, 7 November 2014
November 9th, 1989: the fall of the Berlin Wall
On the 9th of November 1989, the Berlin Wall, that terrible symbol of the Cold War,
finally fell after having divided the city for 28 years. Family members and
friends who hadn’t seen each other in decades were finally reunited.
It was a momentous and joyous event, marking the beginning of the end of
a divided Germany and of a divided Europe. The Soviet Union collapsed two years
later...
After Germany’s unconditional surrender at the end of the Second World
War, control of the country was divided between the Allies: Britain, America
and France took over the west of Germany and the Soviet Union controlled the east of Germany. By 1949
Germany had become two separate countries.
Berlin was also divided between the former Allies (into four Sectors, cf. the map below) and it quickly became the focal point of the Cold War.
Hostilities between the ideologically-opposed superpowers, the USA and the USSR, grew.
Berlin was also divided between the former Allies (into four Sectors, cf. the map below) and it quickly became the focal point of the Cold War.
Hostilities between the ideologically-opposed superpowers, the USA and the USSR, grew.
Map of 1961 showing the wall around West Berlin
Life in the Soviet-controlled East was bleak. Many became disillusioned with communism and the increasingly oppressive social and economic
conditions. Large numbers of people began defecting to the West.
In 1961, the East German authorities erected the Wall ("die Mauer") around West Berlin, soon fortified with huge slabs of concrete and 300 control points, mostly
to prevent the young, well-educated citizens of East Germany from fleeing to the “Free world” (via West Berlin’s airport).
By the end of the 1980s, demands for freedom were growing across the ‘Eastern Bloc’. There was a series of largely peaceful revolutions in Eastern Europe. Within months of the Wall’s checkpoints being opened, German reunification was complete.
The end of Communism in Europe cannot of course be explained by or reduced to just one event; the fall of the Wall remains however very important in many people’s lives because it symbolised
the liberation of millions and an end to the constant threat of world-wide nuclear
war.
The fall of the Wall showed too that change can happen quickly and involve the people directly (i.e. through "people power"); it has
inspired people across the world, like the pro-democracy protesters
in Hong Kong recently.
It is important, however, to keep the significance of that event in perspective... China and Russia, among other countries, still run authoritarian regimes, so to think that more freedom and more democracy can be won through a peaceful and joyous resolution like in Berlin 25 years ago seems somewhat naïve…
It is important, however, to keep the significance of that event in perspective... China and Russia, among other countries, still run authoritarian regimes, so to think that more freedom and more democracy can be won through a peaceful and joyous resolution like in Berlin 25 years ago seems somewhat naïve…
"Die Mauer", November 1989
Question:
The fall of the Berlin Wall is often seen as proof of the "power of the powerless" (i.e. of the people) to bring about important social and political change... Do you think it is up to the people themselves to determine what is best for them (think of the separatist mouvements in Scotland, Catalonia, or Ukraine, and the pro-democracy mouvement in Hong-Kong)?
The fall of the Berlin Wall is often seen as proof of the "power of the powerless" (i.e. of the people) to bring about important social and political change... Do you think it is up to the people themselves to determine what is best for them (think of the separatist mouvements in Scotland, Catalonia, or Ukraine, and the pro-democracy mouvement in Hong-Kong)?
Saturday, 1 November 2014
Is the USA still the world's most powerful country?
Cartoon by Cameron Cardow
Criteria to measure US influence in the world:
Diplomatic relations
Perception of the USA by other
countries
Research and education
Wealth
Foreign trade
Military strength
Nuclear weapons
In which parts of the
world are US troops deployed? http://commons.wikimedia.org/wiki/File:Current_US_military_deployments.png
Tuesday, 7 October 2014
Why did an iron curtain descend across the Continent after WWII?
Document 1: extract of a speech given
by Winston Churchill in 1946
From what I have seen of our Russian
friends and Allies during the war, I am convinced that there is nothing they
admire so much as strength, and there is nothing for which they have less
respect than for weakness, especially military weakness. For that reason the
old doctrine of a balance of power is unsound. We cannot afford, if we can help
it, to work on narrow margins, offering temptations to a trial of strength. If
the Western Democracies stand together in strict adherence to the principles of
the United Nations Charter, their influence for furthering those principles
will be immense and no one is likely to molest them. If however they become
divided or falter in their duty and if these all-important years are allowed to
slip away then indeed catastrophe may overwhelm us all.
Document 2: 1947 political cartoon by Jay Darling
Sunday, 28 September 2014
Saturday, 26 April 2014
What were the ideological differences between the USSR and the USA during the Cold War?
Document 1: US 1950s film poster
Document 2: Extract of a speech given by President Harry S.
Truman delivered on 12th March 1947 before a Joint Session of
Congress
“At
the present moment in world history nearly every nation must choose between
alternative ways of life. The choice is too often not a free one.
One
way of life is based upon the will of the majority, and is distinguished by
free institutions, representative government, free elections, guarantees of
individual liberty, freedom of speech and religion, and freedom from political
oppression.
The
second way of life is based upon the will of a minority forcibly imposed upon
the majority. It relies upon terror and oppression, a controlled press and
radio, fixed elections, and the suppression of personal freedoms.
I
believe that it must be the policy of the United States to support free peoples
who are resisting attempted subjugation by armed minorities or by outside
pressures.”
Sunday, 13 April 2014
To what extent were the 1960s and 1970s a period of “détente” between the superpowers?
Document 1:
Text adapted from the NASA mission
narrative for the Apollo-Soyuz flight, a joint initiative by the USA and USSR.
…Voice contact was made soon after. “Hello Soyuz!” Stafford said in Russian. Kubasov replied in English: “Hello everybody, hi to you Tom and Deke, hello there, Vance!”
…Voice contact was made soon after. “Hello Soyuz!” Stafford said in Russian. Kubasov replied in English: “Hello everybody, hi to you Tom and Deke, hello there, Vance!”
All communications among the five crew members during the mission were
made in the language of the listener, with the Americans speaking Russian to
the Soviet crew and the Soviet crew speaking English to the Americans.
Contact of the two spacecraft, at 12:09 pm on July 17th 1975,
was transmitted live on TV to the earth, and Stafford commented: “We have succeeded,
everything is excellent.” “Soyuz and Apollo are shaking hands now” the
cosmonauts answered.
Hard docking was completed over the Atlantic Ocean at 12:12 pm, 6 minutes
earlier than the prelaunch flight plan, watched by millions of TV viewers
worldwide. “Perfect, beautiful, well done, Tom, it was a good show, we're
looking forward to shaking hands with you on board Soyuz” Leonov said. (…)
Both Soviet Communist Party General Secretary Leonid Brezhnev and US President
Gerald Ford congratulated the crews and expressed their confidence in the
success of the mission.
Stafford then presented Leonov with “flags for your government and the
people of the Soviet Union” with the wish that “our joint work in space serves
for the benefit of all countries and peoples on the earth”. Leonov then presented
the U.S. crew with Soviet flags. (…)
The hatches were closed after Brand told Leonov and Kubasov: “I'm sure
that we've opened up a new era in history.”Document 2:
1968 drawing by Opland, a Dutch cartoonist
Monday, 31 March 2014
Sunday, 30 March 2014
How peaceful was the world from 1953 to 1963?
Document 1:
Closing paragraphs of
the article “On Peaceful Coexistence” by Nikita Khrushchev, published in October
1959 in the magazine FOREIGN AFFAIRS 38, no. 1
(…) The Soviet people have stated and declare again that they do not
want war. If the Soviet Union and the countries friendly to it are not
attacked, we shall never use any weapons either against the United States or
against any other countries. We do not want any horrors of war, destruction,
suffering and death for ourselves or for any other peoples. We say this not
because we fear anyone. Together with our friends, we are united and stronger
than ever. But precisely because of that do we say that war can and should be
prevented. Precisely because we want to rid mankind of war, we urge the Western
powers to peaceful and lofty competition. We say to all: Let us prove to each
other the advantages of one's own system not with fists, not by war, but by
peaceful economic competition in conditions of peaceful coexistence.
As for the social system in some state or other, that is the domestic
affair of the people of each country. We always have stood and we stand today
for non-interference in the internal affairs of other countries. We have always
abided, and we shall abide, by these positions. The question, for example, what
system will exist in the United States or in other capitalist countries cannot
be decided by other peoples or states. This question can and will be decided
only by the American people themselves, only by the people of each country.
The existence of the Soviet Union and of the other socialist countries
is a real fact. It is also a real fact that the United States of America and
the other capitalist countries live in different social conditions, in the
conditions of capitalism. Then let us recognize this real situation and proceed
from it in order not to go against reality, against life itself. Let us not try
to change this situation by interferences from without, by means of war on the
part of some states against other states.
Document 2:
Tuesday, 25 March 2014
Monday, 17 February 2014
Wednesday, 29 January 2014
Friday, 3 January 2014
The USA and the world from 2009 to 2016. A more multipolar world?
President Barak Obama (2009-2017)
During
the two-term presidency of Barak Obama (January 2009 to January 2017), US
hegemony continued to be challenged by Islamist terrorist groups, especially Islamic State.
The
dominant position in the world of the USA was also undermined by:
- the economic downturn following the financial crisis of 2008 (the “Great Recession”);
- the trade deficit (the USA imported more than it exported);
- the high public debt and private debt levels;
- rising inequality in the USA;
- the economic might of transnational corporations (taking power away from the Federal Government);
- anti-globalization NGOs and mouvements (for example the Occupy Wall Street protests);
- the rise of the BRICS countries, on an economic level (within the WTO too) and, increasingly, at a geopolitical level;
- the cost of financing the “military-industrial complex”;
- the proliferation of nuclear weapons;
- the proliferation of biological and chemical weapons (that are cheap and readily available to terrorist groups and to states like Syria);
- the situation in North Korea and the Middle East;
- deteriorating relations with Russia (especially after Russia’s annexation of Crimea in 2014, its attacks on Ukraine and its support of the Hassad regime in Syria);
- organized crime (and the drug trade).
The
world became increasingly multipolar,
the USA having/wanting to share decision-making more with other centres of
power: the Russian Federation, China, and, to a lesser extent, Europe. The
bipolar world of the Cold War period (and the clearly unipolar world during the
Clinton-Bush Jr. years) appeared to some less unstable than the more multipolar world under Obama.
Barak Obama, elected in November 2008, became the 44th President of the USA on 20 January 2009. His message, at the height of the financial crisis, was one of boosting national confidence: “Yes we can!” was his electoral slogan. For many, the American Dream had become a nightmare: increased poverty, social unrest and violence (lack of gun control), ever greater disparities between the wealthy and the poor, worsening health (and difficulties in implementing a workable national healthcare system), etc.
Hillary Clinton was the Secretary of State (head of the Department of State) during
Obama’s first term (2009-13). She made efficient use of “smart power”, a pragmatic
mix of diplomatic, legal, military, economic and “cultural” means to implement
the Obama Administration’s foreign policy. Obama’s foreign policy can be
described as multilateral, realist and (very) cautious. Consensus was sought
with foreign partners; conflict had to be avoided.
The
war in Afghanistan (launched by Bush Jr. in 2001) drew to a close at the end of
2014. The war in Iraq (started by Bush Jr. in 2003) was ended in 2011. In his
2009 Cairo speech, Obama said that the war in Afghanistan was necessary in the
fight against terrorism. He also said that he disapproved of the war in Iraq
(though he did not regret the elimination of Saddam Hussein).
Though
the Guantanamo base was not (as promised by Obama) closed, the use of torture there
was stopped. Al-Qaeda was undermined by the assassination of its leader Osama Bin Laden in 2011 by US Navy SEALs.
After
his re-election in 2012, Obama’s foreign policy impressed perhaps less than during
his first term in office; Obama was accused of being overly cautious (mostly by
the Right). He had serious problems with knowing how to cope with Islamic State
terrorist groups. In a speech in December 2016 at MacDill Air Force Base in
Florida, Obama all but conceded that he was unable to get America out of the
foreign wars, large and small, that grew out of the Sept. 11, 2001, attacks. Obama
said: “We know that in some form this violent extremism will be with us for years
to come. (…) In too many parts of the world, especially in the Middle East,
there has been a breakdown of order that's been building for decades, and it’s
unleashed forces that are going to take a generation to resolve.”
John Kerry was Secretary of State from February 2013 to January 2017. There were positive
foreign policy achievements: in 2015, he supported the Paris Agreement on global
climate change, brokered the nuclear deal with Iran, and restored diplomatic
relations with Cuba. Also, under Obama, the USA decided to meddle less in Latin
America. "The days in which our agenda in this hemisphere so often
presumed that the United States could meddle with impunity, those days are
past," stated Obama in 2015 during a visit to Panama.
Regarding
the GWOT (launched by Bush after 9/11), Obama stated in 2013 that: "We must
define our effort not as a boundless 'Global War on Terror,' but rather as a
series of persistent, targeted efforts to dismantle specific networks of
violent extremists that threaten America." Nevertheless, U.S. military
forces were at war for all eight years of Obama’s tenure: he launched
airstrikes or military raids in Afghanistan, Iraq, Syria, Libya, Yemen, Somalia
and Pakistan.
Accusations from the political Right included being ineffectual in the Syrian civil war (cf. the cartoon), and too conciliatory with Iran over its nuclear arms capacity. Many liberals, however, saw no real difference with the foreign policy of previous Administrations: the intensive use of drones and extensive NSA surveillance were, for them, proof of the usual imperialist stance of the USA…
Accusations from the political Right included being ineffectual in the Syrian civil war (cf. the cartoon), and too conciliatory with Iran over its nuclear arms capacity. Many liberals, however, saw no real difference with the foreign policy of previous Administrations: the intensive use of drones and extensive NSA surveillance were, for them, proof of the usual imperialist stance of the USA…
Thursday, 2 January 2014
The USA and the world from 2001-2009; the hyperpower contested.
The unipolar world of the 90s (i.e. with the USA as unique superpower, as
sole center of power) continued into the years 2000. However, the US’s
hegemonic position, in which the USA tried to impose a “new world order”, became
more and more contested...
US “Stars and Stripes” flag being burned
by (radical?) Muslims (Bangladesh, 2001?)
The demonstrators shown in the photo above are expressing their loathing
of what they see as American imperialism. Islamists (supporters of Islamic fundamentalism) see the USA as decadent;
they strongly reject US military and economic
intervention in the Middle East and also hate the USA because it is an ally of Israel.
President George W. Bush (2001-2009)
In 2001, George
W. Bush, the son of George Bush (the 41st President), became the 43rd President
of the USA (he served until 2009).
9/11 terrorist attack on the Twin Towers, NYC
The vulnerability of the USA to terrorist attacks was spectacularly demonstrated on the the 11th September 2001 when al-Qaeda destroyed the World Trade Center in New York City, symbol of America's economic domination, and attacked the Pentagon in Washington D.C., symbol of its military might. The terrorists succeeded in creating a climate of insecurity and the US's supremacy in the world was shaken; this violent anti-Americanism challenged America's sense of "manifest destiny" (i.e. that the US has to lead the world and promote its values abroad). The Bush Administration reacted aggressively to this attack on mainland America (it wanted revenge?); the US foreign policy became unilateralist and Bush launched his strongly interventionist War on Terror against the
Taliban and al-Qaeda and the "rogue countries" suspected of supporting terrorism. The Department of Homeland Security was set up in 2011 to coordinate anti-terrorist actions.
The US's unilateralist stance meant that it also refused to take part in multilateral negotiations on urgent world problems such as climate change.
The US's unilateralist stance meant that it also refused to take part in multilateral negotiations on urgent world problems such as climate change.
In 2001, the USA led a coalition, under UN mandate, to attack the
Taliban in Afghanistan
(the last US soldiers left at the
end of 2014). This was approved by the UN Security Council and widely supported as a legitimate response to the 9/11 attacks (the Taliban were supporters of Bin Laden). 4,804 Coalition soldiers (including
2,165 US soldiers) were killed. The civilian
victims in the 2007 to 2012 period numbered over 16,000 (most killed by the
Taliban, according to the UN).
Bush reasserted his anti-terrorist stance at his State
of the Union Address in January 2002. He listed the “axis of evil” countries
that posed a threat to the USA and the world, including Iraq, Iran, Afghanistan,
and North Korea. He praised those countries that were assisting the USA in its
fight, including Pakistan.
In 2003, the Bush Administration launched the Iraq War on the suspicion that
Iraq held weapons of mass destruction (no evidence of this was found) and that
Saddam Hussein supported al-Qaeda (there was nothing to support this claim). The
invasion was not approved by the UN and lead to many anti-war and anti-Bush protests throughout the world. The UK Prime Minister, Tony Blair, supported Bush's attack on Iraq. Saddam Hussein was captured and executed
in 2006. The last US soldiers were pulled out in 2011 (by Barack Obama). The number of deaths
is estimated at about half a million (including nearly 4,475 US service members). There were incidents of torture on the part of US soldiers, notably at Abu Ghraib prison. Further controversy was the treatment of prisoners at the Guantanamo Bay detention camp.
Editorial cartoon condemning the Iraq War
(WMD means "weapon of mass destruction")
The total cost of the wars in Afghanistan and Iraq has been estimated at between four and six trillion dollars.
Cartoon by Peter Nicholson
The above political cartoon was published in the Australian Times
in October 2002; it is a humorous take on the increasing dangers to world
stability. The list of places the son or daughter is warned to keep away from include
bars (crowds, associated with possible terrorist attacks), Westerners and
Easterners (i.e. everybody), planes (a reference to the Lockerbie plane crash
in 1988 caused by terrorists, and to 9/11), the Middle East (a reference to all the
problems in that part of the world), Bali (terrorist attack in 2002), and Indonesia
(politically unstable).
Editorial cartoon by Adam Zyglis
criticizing the Patriot Act (2006)
The Bush Administration passed the USA PATRIOT Act in 2006; this anti-terrorism legislation has been very controversial because considered by many to be a means for the government to intrude on the privacy of ordinary citizens. This law to "deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes..." gives the US Federal government the right to arrest and hold indefinitely any person suspected of terrorist activity. It could be argued that the terrorists "won" because, after 9/11, there were greater restrictions on individual freedom, there was less trust of the authorities, and there was increased victimization of ordinary (mostly Muslim) citizens...
President George W. Bush, after having had very high approval ratings after 9/11, steadily lost popularity because of the war in Iraq (from 2003), the mismanagement of the Hurricane Katrina disaster (2005), the abuses of the Patriot Act (from 2006), and the economic downturn (from 2007).
Cartoon critical of President Bush (2008)
In September 2008, Lehman Brothers, an American bank, was the first of several financial institutions to go bust. It was an inevitable step in a financial crisis that had started at the end of 2007 and that was due mostly to short-term profit-seeking by banks. Many US families had borrowed money from banks to purchase a house (they took out mortgages), but they could not afford to pay the money back (the interest rates were too high). More than two million people lost their homes (this is known as the subprimes scandal). The financial crisis became economic and social and has spread world-wide (cf. the Eurozone crisis).
The American economic model is based on growth; this growth necessitates massive borrowing which, when the economy is healthy, is not a problem (in 1945, the debt was massive, but the economy healthy). Since Reagan (1980), public debt (made up mostly of what the US has borrowed from foreign lenders) has much increased (as has private debt, i.e. the money citizens have borrowed from banks). The US government spends more than it gets in taxes. In 1982, public debt (also know as government debt) stood at $1000 billion (one trillion dollars) due to increased military spending and tax cuts. In 1992, it stood at $3,500 billion (Bush Senior spent money on the Gulf War). In 1996, under Clinton, it was at $5,000 billion. By 2008, that had doubled (Bush Junior tax cuts and cost of wars). By 2011, the debt stood at $15,000 billion. Today it is about $17,000 billion ($17 trillion); the USA owes Japan and China over one trillion dollars each. Private debt in the USA is about $40,000 billion. This dependence on foreign loans could undermine the US's economic dominance. Economic mismanagement of the world's (still) biggest economy has had repercussions on the world's economy...
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