Editorial for issue 14 of The Communist. Subscribe now or buy a copy from MarxistBooks.com!

American imperialism is living on borrowed time. In the final analysis, its military-industrial power is predicated on its economic foundations—and those foundations are fundamentally unsound.

The US national debt currently stands at nearly $37 trillion—with another $1 trillion added every three months. To keep taxes on billionaires low and military spending high, the government must continually borrow new money to pay off old debts and interest. Last year, it borrowed an eye-watering $1.8 trillion to cover the difference between revenues and expenses. Interest payments alone amounted to $1 trillion—money that could have been used instead to fund education, healthcare, improve infrastructure, and more.

However, all Ponzi schemes eventually suffer the same fate. When there aren’t enough fresh investors to pay those who got in early, the house of cards collapses—often from one day to the next.

In 2011, Standard & Poor’s downgraded the country’s sovereign credit rating from AAA to AA+, the first such downgrade in history. In 2023, Fitch Ratings did the same. Now, Moody’s has followed suit. Why does this matter? It matters for the same reason your personal credit report matters. If people start doubting your ability to repay your loans, they’ll charge higher interest to compensate for the increased risk. Or they may stop lending you money altogether. That this is happening to the world’s biggest economy has far-reaching ramifications.

Much of the debt is in US Treasury bonds—30% owned by foreign countries. But many lenders are wary of entrusting the feds with their extra cash. Instead, they’re buying precious metals and crypto. Due to waning demand, interest rates for US government securities have risen unsustainably—the opposite of what Trump intended when he launched his ill-conceived trade war. On top of this, his “big, beautiful bill” is projected to add another $4 trillion to the deficit—bringing the debt-to-GDP ratio higher than ever since 1790.

So, where will the money for future spending and debt servicing come from? There are only a few alternatives: print or borrow even more money, raise taxes or cut spending. Inflation has already been spiked by “fiscal stimulus” and “quantitative easing,” so more of that’s not in the short-term cards. Since raising taxes is a political no-go, the country’s few remaining social programs are on the chopping block. And because there’s so little left to trim from them, they will have to borrow even more anyway, further exacerbating their problems.

Good populist that he is, Trump swore he wouldn’t touch Medicaid and even floated mild taxes on the ultra-rich. However, over a decade, his proposed budget would cut $1 trillion from Medicaid and food stamps. Given the lack of quality jobs and universal healthcare, more than 71 million are people enrolled in Medicaid, and roughly 42 million Americans receive food stamps—including millions of Trump voters. As everyone knows, talk is cheap, and the truth is concrete. So is the rising anger.

Good populist that he is, Trump swore he wouldn’t touch Medicaid and even floated mild taxes on the ultra-rich. However, over a decade, his proposed budget would cut $1 trillion from Medicaid and food stamps. / Image: The White House, Flickr

After promising to slash the bloat and corruption, the “defense” budget is set to top $1 trillion for the first time in history. And just who is being entrusted with this largesse? As reported by Real Clear Investigations: “Leaders of the world’s most expensive military have refused to conduct or failed to complete every internal financial audit since Congress first demanded such accountability in the 1990s. The Department of Defense owns over 70% of the nation’s assets and can’t account for half of them.”

This is the cynical double standard when it comes to government spending. Workers and the poor are expected to tighten their belts while the fat cats add notches to theirs.

In 1971, based on median income, 61% of Americans were considered “middle class.” By 2024, it was just 40%. The wealthiest 1% of Americans now own nearly as much wealth as the bottom 90%—five times more than they held five decades ago.

In just the last year, the 10 richest Americans got $365 billion richer—an average of $100 million for each of them every day. Since the average American worker makes around $50,000, it would take a median-wage earner 7,300,000 years to make an equivalent amount. Now, these billionaires are about to get a tax break.

Faced with deep-seated uncertainty, consumer sentiment has plunged, falling 11% in May to the second-lowest reading on records going back to 1952. According to pollsters, the “decline was . . . pervasive and unanimous across age, income, education, geographic region and political affiliation.”

And it’s only the beginning. The capitalists’ war on American workers’ wages, conditions, and standard of living is only set to intensify. A tsunami of layoffs, home foreclosures, and defaults on car payments, credit cards, and student loans are in the making.

Seventeen years since the 2008 tipping point, American workers still haven’t recovered. Under capitalism, they never will. This is the reality dawning on millions as Trump’s promises evaporate along with his approval ratings. They’ve waited long enough for things to turn around. They’re not going to sit idly by forever as things get ever worse. Eventually, as they did in the summer of 2020, they will begin to seize their destiny in their hands.