> MONTHLY REVIEW VOLUME 49 NUMBER 8 JANUARY 1998
> A LETTER TO A CONTRIBUTOR: THE SAME OLD STATE by Harry Magdoff .
> Dollars flowed abroad
> for imports, for maintaining military bases around the world, for economic
> and military aid to real or wished-for allies, and for the rise of its
> multinational industrial and financial firms. This resulted in a persistent
> deficit in the current balance of payments. But in contrast with other
> countries, especially those of the third world, whose balance-of- payments
> difficulties cast them into debt peonage, the United States became richer
> and richer. The U.S. deficits get paid with U.S. dollars-- either by direct
> increase of the money supply or the expansion of credit.
A historical question: did the US really run huge current account deficits during the Pax Americana? We certainly didn't run big trade deficits until the late Seventies, and our net international investment position was solidly positive until 1984 or so. Aren't those current account deficits pretty recent phenomena, a product of the US decline, rather than anything structural to do with the glory days of the Pax Americana?
-- Dennis