America's greatest enemy isn't China or Russia: Its $35 trillion in debt

With a $1.6 trillion deficit this year, $35 trillion in overall debt, and $1 trillion in interest payments this year, if the U.S. dollar is no longer the primary global reserve currency and there is suddenly a true rival to the U.S. currency, then the entire American financial system comes crashing down, writes ‘The National Interest’.

“Big things have small beginnings.” One could say the same thing about the rising economic and financial trading bloc, loosely known as the BRICS bloc.

BRICS is short for “Brazil, Russia, India, China, and South Africa.” The term can find its roots in a 2001 Goldman Sachs report about the economy of the developing world. Many in the West have poo-pooed the term and the very notion that this budding economic alliance is anything but a gigantic show for the leaders of those countries to look like statesmen.

Yet, just as with the embryonic alien monster in Prometheus, the BRICS bloc has moved from a mere theory in the minds of turn-of-the-21st-century Wall Streeters and is slowly growing into a financial dagger aimed at the heart of the U.S.-led economic system.

At the same time, the U.S. economy is going through its own turbulence. COVID-19 and the subsequent global lockdowns shattered what turned out to be brittle supply chains. What’s more, both the Trump and Biden Administrations engaged in the most irresponsible level of deficit spending in the history of America, first to combat the economic downturn caused by the lockdowns, then to stimulate the ailing economy (it didn’t work).  

As a result, inflation skyrocketed, as did interest rates. The price of everything became unaffordable. Average, middle-class Americans — the backbone of the American economy — are in dire straits after four years of this.

Looking on at these trends, the rest of the world, notably the Global South, began thinking that there was no way that the U.S. economy could go on. Russia and China, feeling threatened by the American willingness to use their economic leverage with such wanton abandon, not only against rogue states, but against fellow great powers, have taken to forming the BRICS into something more than just a cool-sounding acronym.

Naysayers in the West argue that no matter what, a Sino-Russian-led BRICS coalition could never challenge the U.S.-dominated economic order.

But the U.S. economy doesn’t look strong. Plus, many other countries in the Global South are worried that the weaponized dollar could be used against them, and they are looking for a hedge against that.

And here is why the U.S. national debt and its out-of-control deficits matter.

With a $1.6 trillion deficit this year, $35 trillion in overall debt, and $1 trillion in interest payments this year, if the U.S. dollar is no longer the primary global reserve currency and there is suddenly a true rival to the U.S. currency, then the entire American financial system comes crashing down.

The ultimate victory for China, Russia, and so many of America’s other enemies would be to kneecap the U.S. economy by sweeping away the U.S. dollar’s dominance. Once the U.S. dollar is knocked off its pedestal, over time, printing and spending its own money to get through each fiscal year becomes impossible.  

U.S. Navy Adm. Mike Mullen famously quipped that the country’s national debt is the greatest national security threat America faces. He was correct.  

By carrying the debt load that the United States has been carrying — and constantly piling more — all while using the dollar’s dominant position as a cudgel against other great powers, Washington has set the conditions to turn the small BRICS bloc into something truly monstrous over the next several decades.

Once that happens, life in the United States becomes very bleak quickly and America goes from a superpower to a middle power in terminal decline overnight. Those are the stakes as the Sino-Russian-led BRICS economic bloc slowly arises.

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