Reddit reviews The Mandibles: A Family, 2029-2047

This is an example of the neoliberal bullshit that passes for economic opinion all over the world. It's everywhere. It's so popular to blather on about apocalyptic public debt that the fiction has been fictionalised!

The "collapse" that people incessantly tell boogieman stories about involves these nations defaulting on their debt. On the governments running out of money because they can't borrow any more of it from their citizens or from foreign markets. Of hyperinflation, people pushing wheelbarrows of cash down the street to buy bread, police and military abandoning their posts because they're not getting paid ... that sort of thing. The book I linked to is an entertaining look into the neoliberal mindset.

China's debt is denominated in Chinese yuan. America's debt is denominated in US dollars. Australia's debt is denominated in Australian dollars. All of those nations are sovereign in their own currency. Their currency is floated on world markets. They will never default on their debt commitments, because they control their currencies.

... and all that comes after the fact that we've just accepted deficit spending by federal governments even has to be funded by the issuance of debt securities. There's no reason why public debt even has to exist: the reason it does at all is because of a neoliberal ideology called Sound Finance. We either obey the neoliberal dogma (and pretend that it's set in stone and the only way of doing business, at the cost of everything and everyone that isn't immediately profitable), or we risk the wrath of the private rating agencies. So scary.

Damn... good question. Too broad to answer with any certainty though I think.

On the one hand, if it just disappeared (and the land went with it and everyone forgot it was there) then things would probably go on as normal, with a lot of new trade routes (Asia-Europe via the Mexico-Canadian sea?) and probably higher costs as a result of reduced economies of scale. I think economic climate would continue, solely on the basis that after disappearing it's like the US was never there so the world "doesn't know what it's missing" so to speak.

On the other hand, if it disappeared but everything else stayed the same, then you'd definitely have economic shocks relating to everything from debt (assuming US debt is now worthless) to commodities to services. This would probably have a lot of knock on effects such as cascading defaults, lack of liquidity, etc. in global markets. I think there'd almost certainly be war too, given the US does sort of act as a world police right now. At the very least, probably a lot more piracy and lawless regions due to destabilization.

If the US disappeared but the land remained... well that'd be an interesting one.

If you want an interesting read on this (sort of) check out a book called The Mandibles. It's fiction but the logic and economic theory in it is pretty robust. Little bit of an outlandish concept but really interesting read.