A Boring Dystopia

This might seem like a minor quibble, but that money doesn't really come from taxpayers, and understanding what seems like a very technical financial thing is really important if you want to understand geopolitics in general. Here's an except from the beginning of David Graeber's Debt: the First 5,000 years, easily one of the single most interesting and enlightening books I've ever read:

Starting in the 1980s, the United States, which insisted on strict terms for the re- payment of Third World debt, itself accrued debts that easily dwarfed those of the entire Third World combined — mainly fueled by military spending. The U.S. foreign debt, though, takes the form of treasury bonds held by institutional investors in countries (Germany, Japan, South Korea, Taiwan, Thailand, the Gulf States) that are in most cases, effectively, U.S. military protectorates, most covered in U.S. bases full of arms and equipment paid for with that very deficit spending. This has changed a little now that China has gotten in on the game (China is a special case, for reasons that will be explained later), but not very much — even China finds that the fact it holds so many U.S. treasury bonds makes it to some degree beholden to U.S. interests, rather than the other way around.

So what is the status of all this money continually being funneled into the U.S. treasury? Are these loans? Or is it tribute? In the past, military powers that maintained hundreds of military bases outside their own home territory were ordinarily referred to as "empires," and empires regularly demanded tribute from subject peoples. The U.S. government, of course, insists that it is not an empire — but one could easily make a case that the only reason it insists on treating these pay- ments as "loans" and not as "tribute" is precisely to deny the reality of what's going on.