Rationale as to why the United States won’t go bankrupt
The current financial situation of the United States
Several reasons as to why the United States won’t go bankrupt
[ 해외특파원 1기 / 김정욱 ] It is difficult for people to imagine the United States going bankrupt since it is one of the most powerful and leading countries in the world. However, approximately two weeks ago, the United States announced that they have 28 trillion and 400 billion debts which is not an expected amount of money for such a country. In this case, it is natural for people to change their dollars to other currencies. Nevertheless, more and more people tend to think that dollars are the safest currency on Earth even though the U.S is encountering this financial complication. To understand this situation we need to know why it is impossible for the United States to go bankrupt.
Some people have a tendency to compare the U.S with Rome since they are the most influential and powerful countries in each period. Therefore people think that it is possible for the U.S to go bankrupt, as did Rome. However, there is a very big difference between them. This difference is ‘globalization‘. Globalization is the main reason why it is hard for the U.S to undergo financial failure. As almost all countries around the globe are connected and are affected by each other, the country that will be the first leader of globalization will not likely to fall so easily. In today’s globalized world, the real hegemony of the world is a transnational corporation. Transnational firms do business around the world, and not surprisingly, most of these companies are American. These transnational corporation’s headquarters are in the United States and are globalizing the world with the U.S. government supplying them with the assistance they require. Of course, most production bases are not in the United States. Through active outsourcing, factories are located in emerging industrial countries such as China and India. Recently, BRICs (Brazil, Russia, India, and China) countries have made strides, however approximately 60% of exports to China are made through subsidiaries of foreign-owned companies.
Additionally, not only are the manufacturing industry dominated by U.S capitals but also financial institutions around the world are dominated by U.S capitals. On the surface, the U.S. economy accounts for only 27% of the world, but its actual control feels much greater for this reason. To make these companies thrive more widely, it is reasonable for the U.S. to make the world Neo-Liberalism or Americanization. Theoretically, under the globalization system, any competitive company can reach the world’s highest level. However, most of the actual results show that only U.S. companies or Japanese and British companies that follow United States-style globalization have reached this level. Rather, companies in other countries that had global competitiveness before globalization began in earnest are either merged with U.S. companies or are gradually declining. As a result, the net profit of U.S companies has increased rapidly since the 21st century when globalization began. This is why globalization is the best and only national management goal for the United States and as far as globalization goes, the United States will never go bankrupt.
