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Comment by quadrangle | Hacker News Reader

Yes, it's TOTALLY different. The U.S. power globally is EXTREMELY tied to the use of the dollar internationally. Everyone else who uses dollars (or has currency pegged to the dollar) is under major economic control and influence of the U.S. Oil priced in dollars is huge.

When the U.S. left the gold standard it was giant fuck you to all the countries who held dollars and could no longer exchange them for gold. The U.S. maintains and exercises military power globally in part to protect the dominance of the dollar.

Note also that state/local taxes in the U.S. are completely different from federal because they can't just make dollars and can only spend dollars received through taxes (which are not deleted in that case) or received from federal spending (or in some cases through the state itself doing business in the market).

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No it's not. Don't spread bullshit.

Taxation works pretty much the same way everywhere. The central banks are separate entities in any modern state/economy/monetary zone. The federal and state/local taxes are the same. The federal government takes on debts like states. You might remember the brouhaha about the debt ceiling and the big sequester in the past few years.

The Bretton Woods system was doomed to fail anyhow, it was a nice try to help the non-US post-war economies, but obviously as soon as some problem arose in the US (looming rise in unemployment), the system fell apart.

The petrodollar thing is real, but it's not important. The US import-export is enormous, the trade with China/India and the EU has a lot more influence on the dollar than oil interests. (And thus conversely the US power structure won't use the US central bank to try to exert power, because it'd fuck up its own economy the fastest - because the US benefits the most from global trade.)

Are you actually aware of the points in the link I posted?

The import/export issue is real in the sense that Chinese folks holding U.S. dollars could buy up lobbyists and land and such in the U.S. if we let them. It's not real in the sense that we could, if we wanted, just give every U.S. citizen an extra $50,000 to dilute the buying power of foreign holders of dollars. That would be aggressive for sure, but we have the power to do that. It's a complex set of arrangements here.

Yes, the U.S. benefits the most from the current arrangement, so we aren't interested in screwing that up. But we could and would take action if the foreign-held dollars started getting used in ways that were bad enough for us to do something about it.

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