ABSTRACT
Review of US national income and product accounts show that in the build-up to the 2008–2009 global financial meltdown, the US with its quadruple deficits – trade deficit, budget deficit, capital account deficit, domestic savings hovering near zero (and with the world’s largest national debt) – could only post GDP growth by foreign borrowing. 1 This naturally leads us to the question of the US sector(s) able to parlay its borrowing into a growth dynamic. In the vice grip of shareholder value metrics the US corporate sector, while borrowing amply, could not become a significant driver of GDP growth. In both 2006 and 2007, for example, combined stock repurchases and dividend payments by US non-financial corporations significantly exceeded fixed investment. 2 And, as a long-term trend beginning in the Reagan neoliberal years, US non-financial corporations displayed a distinct trajectory of disaccumulation such that the stock of fixed investment was 32 percent lower at the outset of the meltdown than it would have been had the 1960s and 1970s “golden age” rate of accumulation been maintained. 3 The US government also borrowed and spent. After all, US government spending as a share of GDP in 1995 was 37 percent. In 2006, after a decade of neoliberal huffing and puffing, US government spending as a share of GDP remained near 37 percent. 4 However, under the spell of neoliberal mantras, governments shied away from the sort of fiscal policies that had fuelled growth in the 1960s and 1970s: the curb in the rise of the US deficit as a percentage of GDP in the 1990s also factored into neoliberal hype over the United States as a “market” model of growth.
