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Submitted by Danielle Goodrich –
For decades, the United States has enjoyed extraordinary advantages from the global role of the U.S. dollar. It has lowered borrowing costs, supported American living standards, and underwritten U.S. military power. But those advantages were never free—and today, the bill is coming due.
At the center of this system is what analysts often call the “petrodollar”: the long-standing practice of pricing global oil trade in U.S. dollars. While not written into law or formal treaty, this arrangement—established after the U.S. left the gold standard in the early 1970s—helped cement the dollar as the world’s reserve currency.
That status, in turn, enabled the United States to run persistent trade and budget deficits while maintaining the most powerful military in history.
The problem is not that this system existed. The problem is that Washington has come to treat it as permanent.
How the System Really Works
When oil is priced in dollars, countries around the world must hold dollar reserves. Those reserves are often invested in U.S. Treasury debt. This keeps U.S. interest rates lower than they otherwise would be and allows Washington to finance spending levels that would be politically or economically impossible for most nations.
Cheap borrowing then supports:
- Large military budgets
- Global basing and deployments
- Extensive security guarantees
In effect, dollar dominance, debt, and military power reinforce each other. This arrangement has worked for decades—but only because the world trusted U.S. institutions, fiscal restraint, and strategic judgment.
Three Ways This Ends — and None Are Cost-Free
History offers no example of a reserve currency lasting forever. The real question is not whether the dollar’s dominance changes, but how.
1. A Managed Transition (The Best Option)
Under a responsible path, the U.S. would accept a more multipolar financial world while preserving national strength.
That would mean:
- Rebuilding domestic industry and supply chains
- Maintaining energy independence and exports
- Reducing deficits over time
- Narrowing military commitments to core national interests
- Allowing limited multi-currency trade without treating it as a provocation
Under this scenario, the dollar remains strong—just no longer unchallenged. America retains sovereignty, allies retain stability, and war risks decline.
The cost is real: Wall Street loses some privilege, sanctions lose some bite, and Washington must relearn fiscal discipline.
2. A Forced Reset (The Most Likely)
If reform is delayed, markets eventually impose it.
This path would likely involve:
- Inflation or sharp dollar devaluation
- Emergency monetary measures
- Rising interest rates
- Sudden pressure to cut military spending
Countries that prepared alternatives—China, Russia, and resource exporters—would weather the shock better than those dependent on U.S. debt markets.
This is how monetary illusions usually end: not by choice, but by necessity.
3. Disorderly Decline (The Worst Outcome)
The most dangerous path is denial—continuing unlimited deficits, expanding sanctions, and fighting multiple conflicts while assuming the dollar will always carry the load.
This combination risks:
- Loss of confidence in U.S. debt
- Financial market instability
- Strategic overextension
- Domestic political fracture
Empires rarely collapse because of one bad decision. They collapse because leaders insist reality can be postponed indefinitely.
Are Forever Wars a Financial Problem?
One uncomfortable truth deserves honest discussion: a system built on debt-financed global dominance creates structural pressure for intervention.
This does not mean wars are fought “for the dollar.” It means:
- Reserve currency status reduces the immediate cost of war
- Debt hides trade-offs from voters
- Military commitments expand faster than public consent
Over time, war becomes easier to start—and harder to end.
That is not a conservative outcome.
Can America First Mean Fewer Wars?
Yes—but only if “America First” is defined correctly.
A serious America First strategy would prioritize:
- Productive capacity over financial engineering
- National defense over global policing
- Fiscal responsibility over monetary privilege
- Strength at home over dominance everywhere
What it cannot do is promise:
- Endless deficits
- Permanent reserve currency status
- Global military primacy
- And no forever wars
At the same time.
That is not realism. It is wishful thinking.
The Choice Before Us
The United States still has time to lead a responsible transition—one that preserves prosperity, security, and constitutional self-government.
But time is not unlimited.
The longer Washington avoids reform, the more likely change comes through crisis rather than choice. And history suggests that crises rarely respect the interests of ordinary Americans.
A strong dollar, a strong military, and a strong nation are compatible.
An unchecked debt empire is not.
