While everyone’s angst focuses on Trump shifting economic policy toward a more protectionist neo-merchantilism, the true imminent danger to the global economy is being ignored.  Half of the Federal deficit is now spent on servicing the sovereign debt.  The United States is now spending more on the sovereign debt than on alleviating poverty.  The public cost of the sovereign debt is approaching what the Federal government spends on defense.

The Yeti hidden in plain sight is the growing private and public debt of the United States.  The global rule-based world order, which champions Free Trade and relies heavily on monetary policy, has been largely sustained by the sovereign debt of the United States and the private debt of American consumers.  Ronald Reagan began the shift in economic governance to a philosophy of neoliberalism, with an emphasis on monetary policy and Free Trade to supply the country’s needs.  Reagan championed a service economy rather than a productive economy.  The result has been creation of 97 percent of the sovereign debt over the last 45 years.  At present the total private and public debt of the United States amounts to about $100 trillion which is the size of the entire global GDP.  (Don’t believe it, check the links below.)  Free Trade and monetary policy has not made the United States more secure or more prosperous.  

As we have seen, Trump using tariffs to limit foreign access to US consumers has poised the entire interconnected world order for collapse.  Any disruption of the flow of money out of the United States to countries around the world is an existential threat to the global world order.  But the danger of limiting access to the US marketplace pales compared to the problem of sovereign debt.  So, what happens if the United States no longer has the ability to service the sovereign debt?  What happens to the global world order if the United States defaults on sovereign debt?

These trade dependent foreign countries are exploiting the United States for their own profit.  These foreign trade partners are not paying toward the security and prosperity of the United States.  The mountain of private and public debt in the United States speaks for itself.  That’s the Yeti everyone is ignoring.  

Our sovereign debt is 140 times larger than Elon Musk’s reported wealth.  Taxing the rich won’t get it done.  A worker uprising in a grand Socialist revolution would only get debt because the capital has already left the country.  We’re not going to save ourselves by returning to the status quo of Free trade and monetary regulation.  We just can’t afford that any longer. 

Here’s a some links people should check out:
U.S. Debt Clock.org
US Government Spending
IMF: Central Government Debt
IMF: GDP