Publication

This report examines America's ability to secure large quantities of external financing from foreign governments. Specifically, it discusses whether this ability is a reflection of US political power, a constraint on its ability to exercise power or a combination of the two. The author explains that indebtedness limits America's ability to influence other countries' policies. The report proposes ways for the US to guard against the effects of a disruption in foreign financing, such as consulting with allies who hold dollars and encouraging other creditor countries to spend and invest surpluses instead of accumulating reserves.