Such superheroes are the fixed-income traders and investors who sell bonds, or threaten to do so, to push back against economic policies of a government or business plans of a private enterprise.

The justification is that these debt investors or traders – and their cheerleading pundits in the financial press – work to impose discipline on governments by selling off bonds of those that are being profligate or irresponsible, such as loose monetary policy or fiscal spending that is considered inflationary.

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However, I have recently started to wonder why no one I have read ever thought Carville’s saying would also make perfect sense when applied to the US government bond market, namely US treasuries.

Washington’s unrivalled ability to borrow at a low cost is what sustains its global empire protected by the world’s – and history’s – most expensive military. The latest Pentagon budget is US$849.8 billion, needed to counter the Chinese bogeyman (and mini-me Putin)!

When a country, whether friend or foe, buys lots of US treasury debt and therefore lends its hard-earned money to Uncle Sam at low interest rates, it is essentially paying for its own oppression. That is, perhaps, the genius of the US treasury market that is the biggest, deepest, most liquid, and at least until recently, supposedly risk-free.

The daydreaming left and cynical right

Both the left and the right have got it wrong about the US government debt, which now stands at US$31.4 trillion. I would argue the left gets it wrong because of their laudable and transparent but unrealistic agenda. However, the right has an unstated agenda that needs to make sure most people don’t really understand for it to work. It isn’t so much that the right is wrong but rather being deliberately misleading. It’s policy by misdirection. (How else do you explain the wellspring of support for Donald Trump from the working and underemployed classes?)

Now consider the usual respective and representative arguments of the left and right against “unsustainable” government debt in the United States. I will be generalising but hopefully not by much. They actually amount to the same argument, except that one side wants to cut warfare or defence spending, while the other wants to reduce welfare or social security and levy no or low taxes for the rich. However, both sides agree “the debt crisis” is unsustainable. Needless to say, the right has been successful for more than two decades now, reducing welfare and wages while cutting taxes and maintaining warfare!

Let’s start with the left. A recent article in Common Dreams by US economist Jeffrey Sachs is fairly representative of the left-of-centre position.

It’s titled “America’s Wars and the US Debt Crisis”, and it argues that “to surmount the debt crisis, America needs to stop feeding the military-industrial complex, the most powerful lobby in Washington”.

“In the year 2000, the US government debt was $3.5 trillion, equal to 35 per cent of the Gross Domestic Product (GDP). By 2022, the debt was $24 trillion, equal to 95 per cent of GDP,” he wrote.

“The US debt is soaring, hence America’s current debt crisis. Yet both Republicans and Democrats are missing the solution: stopping America’s wars of choice and slashing military outlays.

“Suppose the government’s debt had remained at a modest 35% of GDP, as in 2000. Today’s debt would be $9 trillion, as opposed to $24 trillion. Why did the US government incur the excess $15 trillion in debt? The single biggest answer is the US government’s addiction to war and military spending.”

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The US national debt is rising by US$1 trillion about every 100 days. On its current trajectory, according to the Congressional Budget Office, US debt will reach 185 per cent of GDP by 2052.

What’s the solution? Cut military spending, according to the left. “Facing down the military-industrial lobby is the vital first step to putting America’s fiscal house in order,” Sachs concluded.

Now consider the right’s argument.

Republican Senator Tommy Tuberville is fairly representative of the right. He recently earned kudos in right-wing media for declaring the US is “dead broke” and that overall government spending, but especially social security, was a “scam.” By scam, I assume he means future Americans will end up paying for profligate spending in the present, thus mortgaging America’s future. Who can argue with that?

It strikes me that Tuberville would agree with almost everything Sachs wrote except the last bit about cutting defence. Rather than bringing the budgetary scalpel on defence spending, he would focus on “reforming” welfare and social security.

Both the left and the right’s usual arguments would be true or relevant if the US were your usual democratic republic. But it is also a global empire and maintaining itself by amassing deficit and debt is an imperative. But how?

An empire that runs on other people’s money

Every empire in history had its own existential justification for the good of the world. In the US case, it’s freedom and democracy.

It may be counterintuitive but the US empire today requires running a huge national debt and trade deficit. The country does not have the industrial and manufacturing capabilities to earn enough to pay for history’s most expensive military. It needs other people’s earnings to pay for it, ergo rising government debt and trade deficit, and to do so by expanding rather than eroding hegemony.

The most concise explanation that I have come across of this weird epoch-changing phenomenon of postmodern empire-building and maintenance is from Yanis Varoufakis, the economist and former Greek finance minister during the last global financial crisis. He was speaking at a forum organised by the British-based Novara Media last month.

“If I were the Pentagon, I would not be worried about the developments on the military terrain,” he said.

As he explained it, the real challenge is from alternative financial channels and payment systems as well as other currencies, including a central bank digital currency (CBDC), which challenge the dominant status of the US dollar as the world’s premier reserve currency. He was specifically referring to China.

“[They] can easily undermine the monopoly that the dollar has on international transactions because all the power of the United States from this whole panoply of force is based on the US dollar,” he said.

“The American economy is becoming a smaller and smaller percentage of the world economy. It is highly in the red. They have [had] a huge trade deficit since 1968 and they have a huge budget deficit, so they need other people’s money.

“They [the US] are the only empire in the history of humanity who are growing stronger the more they are in the red. What allows them to do that is that they print the world’s [dominant reserve] currency.”

What Varoufakis means is that the whole world needs a lot of US dollars for all kinds of transactions, so Washington can keep printing money – unlike all other countries – while keeping inflationary pressure manageable.

The other side of the coin is that the US treasury market is the gigantic debt machine that absorbs the sweat and tears of other countries’ workers by issuing endless debt that goes into funding a military-backed empire that oppresses them.

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Just think of inflation as making your currency less valuable or desirable. So long as everyone still wants or needs the greenback, it’s still valuable and desirable because the US-dominated global financial system creates and maintains constant demand for the dollar, even if its share of global GDP is constantly and irreversibly dropping.

The real dangerous challenge to the US empire, Varoufakis is saying, is to undermine or destroy that dollar demand, an unlikely prospect in the foreseeable future. However, China clearly presents that threat or at least the possibility of a credible threat. THAT is the real “yellow peril”, everything else about the “China threat” is just noise.

The postmodern empire, from gold to fiat

The early modern French monarchy also ran up huge national debt, usually to fund wars. But the heavy debt enfeebled, rather than strengthened the old regime, eventually contributing to 1789.

Debt, deficit and fiat money are different features of the underlying foundations of the US empire, which has become more imperial rather than less in recent years.

Granted, the US began and stayed for a long time as a fairly typical Western empire. From America’s inception, its ever-expanding militaristic empire was run pretty much like other traditional premodern and modern ones, at least until Richard Nixon.

Beginning with black slavery and the westward continental expansion that exterminated most of the indigenous populations, it expanded to Latin America along with annexing a large chunk of Mexico, and then turned the entire Western hemisphere into its sphere of dominance. So far, so normal for just another empire.

By the end of the 19th century, after two industrial revolutions, the US was already the world’s predominant economy, but not yet a military match to the British Empire.

That changed with World War II. The modern US empire that emerged out of it was still like a modern Western empire, if only bigger. As it took shape during the Cold War, it exterminated or helped exterminate resistant natives, and social-democratic and nationalist movements outside western Europe, under the guise of anti-communism, across what used to be called the Third World, but now the Global South.

The US dollar replaced the British pound as the world’s dominant currency and was tied to a gold standard as defined by the “Bretton Woods’” system of fixed exchange rates and its financial institutions.

Back then, US industrial output outpaced everyone. Its share of world GDP peaked in the late 1950s at over 40 per cent. Naturally, it ran budget and trade surpluses, not the least because its tax system was much more progressive back then. It used its own money to dominate the world, or at least those parts of the world outside the Soviet sphere of influence.

It could afford both bullets and butter while its middle and working classes flourished. It could bomb the rest of the world and still feed its own people. That, of course, was a healthy and well-rounded characteristic of every great empire worthy of its name throughout history: its ability to dominate and exterminate others while keeping its own people well-fed.

This was both a privilege and a burden. The privilege was that it didn’t have to worry about its balance of payments, which unlike everyone else, freed the US – at least for a time – from constraints on how it ran its (otherwise expensive) foreign policy, including wars, and its domestic economy.

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The burden, however, is that, unlike all other currencies, it could not devalue the dollar. All other currencies would then also devalue and so the US would gain no advantage in its trade and payments positions.

Then came Richard Nixon. Whatever you say about the late president, he had some super-smart financial advisers who understood the global financial system, and he was wise enough to listen to them.

They convinced him that the US could keep its privileged position as issuer of the dominant reserve currency while freeing itself of the burden by getting off the gold standard, that is, ending the dollar’s convertibility with gold.

And so, in the early 1970s, he essentially told the world to stuff it, we have no more gold for you.

He also didn’t have much of a choice. The war in Vietnam was costing too much, and US balance-of-payments deficits were piling up throughout the 1960s, while the Bretton Woods system was breaking down and the US was depleting its gold reserves as a result.

It was a genius bet! The wonderful world of free-floating exchange rates arguably made the US empire even more powerful than ever over the decades by enabling it to run on other people’s money. The drawback, of course, is that deficit and debt are now probably permanent and irreversible features of the US economy.

Throughout history, successful empires never voluntarily gave up dominance. They only ended through a combination of external pressures and internal strife. Or, as historian Arnold Toynbee likes to say, civilisations – mostly based on empires – die by suicide, not murder, which is at most the coup de grace.

So, if you accept the US is an empire, but granted, a highly unusual one historically speaking, it’s simply out of the question that it will ever voluntarily follow the leftist solution and give up on escalating defence spending on which the empire is run.

The right will always win, even as it constantly complains about the evils of deficit and debt as an excuse to exercise the greatest theft of wealth and transfer of power from the masses to the very rich and powerful. Deficit and debt are the twin pillars of empire.

Unfortunately, they have enormously bad consequences on the living standards of its domestic population, and they will only get worse. Large swathes of the US population are impoverished and politically disenfranchised, and the future of young Americans is being mortgaged to run and maintain a militaristic empire not of their own choosing. Just like Rome, the empire is cannibalising the republic.

At some point, the US dollar will lose its lustre to the world, and when that time comes, the empire will end, too. We just don’t know when.