Why the US Economy Feels Stuck: A Chat on Money, Power, and the Constitution

Two economists, Michael Hudson and Steve Keen, sat down for a chat about the United States. They pointed out that the way the Constitution was written gave extra power to a small group of rich people. They compared it to the line from Animal Farm that says all animals are equal but some are more equal than others. This shows how the system looks democratic but works for the elite.

They argued that the United States uses the dollar as world money to push its own interests. Sanctions on other countries are one tool they use. Yet most of the frozen Russian money sits in euro accounts, not dollar accounts. The idea that America lives beyond its means is not simple. Many other nations, like China, Japan, Germany and countries in Southeast Asia, try to sell more than they buy. They see trade surpluses as a way to keep jobs at home. Keynes once imagined a world currency called the bancor to keep trade balanced. He thought nations with big surpluses were the real danger because they hoard money that can destabilize the system. So fixing trade problems needs both sides.

They also said the dollar’s strength and the US trade gap are linked to overseas military spending. But this does not explain the huge deficit with China, where the US has almost no bases or troops. The economists noted the 250th birthday of the nation as a moment to reflect. They see a loss of industrial base, a rise of finance, and growing influence of Wall Street and the military‑industrial complex. Campaign money rules let big donors shape politics, which further tilts the field.

The talk ended with a look at Federal Reserve actions, tensions with Iran, and swings in oil prices. They warned that if inflation is not handled well, it could flip into a debt‑deflation spiral. That scenario could drag the whole world into a deep slump.