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116 7 Is Debt the New Karma? Why America Finally Fell Apart Morris Berman The American Way of Life—which can be basically characterized as the union of technological innovation and economic expansion—has been mythologized or romanticized in various ways, and one of these is in terms of the story of Prometheus, a god of great energy who stole fire from Zeus and passed it on to mankind. It is a powerful image, and one that feeds the notion of American exceptionalism. What Americans tend to forget, however, is that there was a debt involved in this transaction. For Zeus was angry at Prometheus and had him chained to a rock, where an eagle or a vulture would come every day and eat out his liver. Since Prometheus was a god, the liver would regrow during the night, only to be devoured again the next day. Unfortunately for the United States, and contrary to popular belief, the country is not divine, and so its liver is now being devoured without possibility of regeneration. We can thus summarize the story as follows: first hubris, then nemesis—a fair portrait of the rise and fall of the American empire. Hubris incurs the debt; nemesis is the collection agency that comes to get the money back. A second allegory of the American Way of Life is the story of Dr. Faustus, who made a pact with the devil. “A Faustian bargain,” writes the Canadian author Margaret Atwood in her book Payback, “is one in which you exchange your soul or something equally vital for a lot of glitzy but ultimately worthless short-term junk.”1 Your soul, in other words, is the debt that has to be paid at the end of the day. In effect, the American Way of Life has been a Faustian bargain, and this is true both domestically and in the arena of US foreign policy. Alistair Cooke, who used to host a Letter from America program on the BBC every week, once said that the Is Debt the New Karma? | 117 essential idea of America was to regard as necessities those things that the rest of the world regarded as luxuries. This attitude manifests itself in the fact that although the United States comprises less than 5 percent of the world’s population, it consumes 25 percent of its energy—a situation that was condemned by only one American president , Jimmy Carter, and Americans did not take kindly to him as a result. The dark or debt side of the notion that life is about unlimited material goods shows up in the data on bankruptcy: whereas 8,600 Americans filed for bankruptcy in 1946, more than 2,000,000 did in 2005. Put another way, in 1946 one in 17,000 Americans declared bankruptcy; in 2005, one in 150 did.2 By 2006, the total public debt stood at $9 trillion, or 70 percent of the GDP, and personal bankruptcy filings for 2007 increased 40 percent over the figure for 2006. Journalist Chris Hedges reports that as of 2009, American consumers were $14 trillion in debt. As for the activity of the US government in this arena, Hedges notes that the Obama administration “has spent, lent or guaranteed $12.8 trillion in taxpayer dollars to Wall Street and insolvent banks in a doomed effort to reinflate the bubble economy, a tactic that at best forestalls catastrophe and will leave us broke in a time of profound crisis. [In addition, the Obama administration] has allocated nearly $1 trillion in defense-related spending and the continuation of our doomed imperial projects in Iraq, where military planners now estimate that 70,000 troops will remain for the next 15 to 20 years.”3 In fact, the bailout did not stay at $12.8 trillion for very long; it soon turned into $13.3 trillion, then $17.5 trillion, and, at one point, $19 trillion. Meanwhile, we are expanding the war in Afghanistan, a land that has traditionally been called “the graveyard of empires.” But “America’s most dangerous enemies,” writes Hedges, “are not Islamic radicals but those who sold us the perverted ideology of free-market capitalism and globalization. They have dynamited the foundations of our society.”4 The best example of these domestic radicals is the Wall Street firm of Goldman Sachs (GS), the world’s most powerful global bank. In a 2009 article in Rolling Stone, journalist Matt Taibbi documents how GS played a key role in the...

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