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This week, Jamie Dimon, the CEO of JPMorgan Chase, stood in front of a room full of bankers and big investors at a conference in Oslo, Norway, and warned that “there will be some kind of bond crisis, and then we’ll have to deal with it.” He blamed rising U.S. government deficits, oil prices, and global conflict. The financial press picked it up immediately. Yahoo Finance, Inc., CNBC, and dozens of others ran the warning as if it were a serious forecast that the public should worry about.

It does deserve attention, but not for the reasons being given. Dimon’s warning is worth a closer look precisely because, when you slow down and ask what he actually means, it doesn’t really say anything. And once you see that, you can see how the same trick has been running American economic politics for fifty years.

What Dimon Doesn’t Say

Read the coverage carefully. Dimon never explains how a bond crisis would actually start. He doesn’t point to anything the country is running out of. He doesn’t describe how prices would rise or what would tip things over. He just lists three worrying-sounding things (“geopolitics, oil, government deficits”) and lets the audience get nervous on its own. That’s not analysis. It’s a feeling.

It’s also worth pinning down what kind of bond crisis he’s actually warning about, because he never says. Dimon uses the phrase “some kind of bond crisis” without specifying which kind. But the reasons he gives (deficits, geopolitics, oil) only make sense as causes for a U.S. Treasury bond crisis, and the UK comparison the original article uses to illustrate the danger is explicitly about British government bonds, called gilts. So he’s clearly alluding to a sovereign debt crisis, the kind where investors lose faith in U.S. government bonds and force interest rates up. He just doesn’t say so plainly. The vagueness is convenient. It lets him invoke the alarm of a Treasury crisis, which is what makes the deficit framing land emotionally, while keeping his exit ramp open if anyone challenges him on the mechanism. A more honest version of the warning would name what’s actually being predicted, and then have to explain how a country that issues its own currency could be forced into a debt crisis on debt it owes in that same currency. That conversation would end the warning before it started.

A real crisis needs a real cause. So what’s the cause supposed to be? It can’t be that the U.S. government will run out of money. Here’s a fact most people aren’t told: at the national level, the U.S. is what’s called a currency sovereign. That means it issues its own currency (the dollar), and it pays its debts in that same currency. The federal government is the source of what’s called base money, the foundational dollars that everything else in the financial system is built on. Commercial banks create most of the dollars that circulate in the economy by making loans, but every one of those bank-created dollars is ultimately settled in base money that only the federal government can produce. Because of this, the federal government can no more run out of dollars than a bowling alley can run out of points to put on the scoreboard. The Federal Reserve Bank of St. Louis has said this directly: as the only maker of base dollars, with debts owed in those dollars, the U.S. government can never go bankrupt.

This isn’t fringe economics. It’s how the system actually works. When Congress approves spending, the Treasury tells the Federal Reserve to add money to bank accounts. New money comes into existence through what amounts to a typed entry in a computer. Taxes don’t fund this spending. Taxes pull money back out of circulation after the fact, mostly to keep prices in check.

If that sounds radical, it shouldn’t. Back in 1946, a man named Beardsley Ruml, who was the chairman of the Federal Reserve Bank of New York, gave a speech to the American Bar Association titled “Taxes for Revenue Are Obsolete.” Ruml wasn’t some left-wing professor. He was a corporate executive (he also chaired Macy’s), and he actually invented the modern paycheck withholding system. He explained, plainly, that the federal government doesn’t need to collect taxes to spend. Once a country has a central bank and a currency that isn’t tied to gold, taxes serve other purposes (controlling inflation, shaping who has wealth, encouraging or discouraging behaviors), but funding the government isn’t one of them. We’ve spent eighty years pretending he didn’t say it.

The Household Comparison That Won’t Die

When Dimon, or anyone else, warns that U.S. deficits are “unsustainable,” they’re really comparing the federal government to a household. A family that spends more than it earns runs out of money, gets cut off by lenders, and ends up in trouble. Apply that picture to the U.S. and you get the bond-crisis story.

The comparison falls apart at the first step. Households use dollars. The federal government creates them. States and cities also use dollars without making them, which is why a city really can run out of money and really can default. Businesses use dollars. So do other countries that have to borrow in foreign currencies they don’t control. The federal government is the one player in the U.S. economy that doesn’t share these limits, and it’s the only one Dimon is talking about.

What does limit the federal government is real stuff. If the country tries to buy more goods, services, and labor than it can actually produce, prices go up. That’s inflation, and it’s the real ceiling. So at the national level, the right question is never “can we afford it?” It’s “do we have the doctors, workers, materials, and energy to do this thing?” Those are completely different questions, and they lead to completely different politics.

Why the UK Story Doesn’t Apply Here

The Yahoo article props up Dimon’s warning by comparing the U.S. to the UK’s 2022 bond scare under Prime Minister Liz Truss. The story is meant to suggest that America is one bad announcement away from the same fate. It isn’t, and the comparison is doing a lot of work it hasn’t earned.

Here’s what actually happened in the UK. British pension funds had been making complicated, risky bets that required them to put up extra cash whenever interest rates moved suddenly. When Truss announced unfunded tax cuts, interest rates jumped, and those bets blew up. The pension funds had to dump UK government bonds (called gilts) to raise cash, which made bond prices fall and interest rates rise even more, which made things worse. The Bank of England had to step in to stop the spiral. It was a problem about pension funds making risky bets in a country whose currency isn’t the world’s main one. It wasn’t really a problem about government borrowing.

The U.S. is in a fundamentally different position. The dollar is the world’s reserve currency. That means almost every other country and big company on Earth holds dollars and uses them for trade. There’s a constant, structural demand for dollars that the UK simply doesn’t have for pounds. People have been predicting for forty years that bond markets would force the U.S. into cuts and austerity, and it keeps not happening, because the mechanism just isn’t there.

Where Dimon Has a Real Point He Isn’t Making

There’s one part of the bond-trouble story that actually matters, and it’s the part Dimon avoids. The dollar’s role as the world’s reserve currency is what gives the U.S. its extraordinary financial flexibility. That role isn’t a law of physics. It’s a political achievement built up over decades, based on the world trusting that America will be predictable, follow its own rules, and act as a neutral place to hold and move money.

The Trump administration has been actively dismantling that trust on multiple fronts at once. Tariffs have been announced, raised, paused, and reversed on no clear schedule, leaving every business that imports or exports anything unable to plan more than a few weeks out. Long-standing allies have been publicly threatened, including suggestions about annexing Greenland, taking back the Panama Canal, and turning Canada into the 51st state, which signals to every other country that mutual treaties and security guarantees can be tossed aside on a whim. Sanctions are being used as a casual political tool against friend and foe alike, which is the single biggest reason countries have to think about getting off the dollar in the first place. The administration has openly attacked the independence of the Federal Reserve, threatened the rule of law in financial cases, and treated international institutions like enemies. Each one of these moves, on its own, would worry the people who park trillions of dollars in U.S. Treasury bonds because they thought America was the boring, reliable choice. Doing all of them together is something different.

The result is that countries are quietly building alternatives, and the alternatives are no longer hypothetical. China is signing trade deals with Brazil, Russia, Saudi Arabia, and dozens of other countries that settle in yuan instead of dollars. The BRICS bloc (originally Brazil, Russia, India, China, and South Africa, now expanded to include several Middle Eastern and African economies) has been openly working on a shared payment infrastructure designed to move money between member countries without touching the U.S. banking system. Central banks are buying gold at the fastest pace in decades, which is a quiet way of moving reserves out of dollars. None of these alternatives is ready to replace the dollar tomorrow. But every one of them gets stronger every time the U.S. acts unpredictably, and that’s exactly what’s been happening.

The Iran war is the cleanest example of how this works, and it’s worth a closer look because Dimon himself cited it as a reason for his crisis warning. For about fifty years, the dollar’s reserve status has been propped up by what’s called the petrodollar arrangement. Saudi Arabia and other oil producers agreed to price oil in dollars, which meant every country on Earth needed to hold dollars to buy energy. That single arrangement created enormous, automatic global demand for U.S. currency. The administration’s handling of the Iran war has put that arrangement under serious strain. Saudi Arabia has been openly negotiating oil sales in yuan with China. Iran, now far more aligned with China and Russia after the conflict, has been pushed entirely out of the dollar system. Other Gulf states are watching, hedging, and quietly diversifying. The petrodollar isn’t dead yet, but it’s been weakened more in the last few years than in the previous forty combined, and almost all of that damage traces back to specific U.S. policy choices.

So when Dimon invokes “geopolitics” and “oil” as reasons for a coming bond crisis, he’s pointing at real things. He’s just describing them as if they’re weather, as if they fell from the sky, when in reality they’re the direct downstream effects of an administration deliberately torching the relationships and arrangements that make the dollar valuable in the first place. The threat isn’t abstract pressure on the deficit. The threat is that the United States is actively driving the rest of the world toward yuan-denominated trade, BRICS payment systems, and post-petrodollar arrangements, and once those alternatives mature, the extraordinary financial flexibility America has enjoyed for half a century will be permanently diminished.

If a real bond crisis ever does show up in the United States, this is the door it walks through. Not the deficit number, not “entitlements,” not Social Security. A loss of the dollar’s privileged global position, caused by deliberate policy choices coming out of the White House.

Dimon doesn’t make this argument. That’s worth pausing on. He’s not a stupid man, and he runs the largest bank in the country. He understands reserve-currency dynamics and petrodollar mechanics better than almost anyone alive. Yet his public warning points the finger at Congress and voters for the deficit, not at the administration for the actual, observable damage being done to the dollar’s standing right now. By blaming “deficits” in the abstract, he gives political cover to the people actually wrecking the system, and he turns public attention toward the policies their critics want (universal healthcare, public investment, full employment) rather than toward the policies that are causing the real risk. Maybe that’s coincidence. Maybe it’s the natural reflex of a banker who’s used to blaming public spending for everything. Or maybe it’s something more deliberate: a powerful figure in finance protecting an administration whose policies are dangerous to the country but profitable for his industry. I can’t read his mind. But the framing is suspicious, and it’s worth saying so.

The Decoder Ring

I’ve written before about how mainstream economics often works less like a science and more like a set of talking points that quietly shut down debate. In *Your Mainstream Economics Decoder Ring*, I laid out 31 assumptions that limit what Americans think is politically possible. Dimon’s warning leans on two of them: Assumption #7 (the idea that federal spending has to be paid for by taxes or borrowing, just like a household) and Assumption #22 (the idea that deficits create unsustainable debt). Both of these sound like math. They’re not. They’re political opinions wearing the costume of economic law.

These two assumptions have been doing the same job for fifty years. They’ve been used to make universal healthcare, paid leave, full employment, climate action, and serious public investment seem impossible. Not because we lack the workers, hospitals, materials, or energy to do these things, but because doing them would shift power and money away from creditors and asset holders.

Jamie Dimon runs a giant bank. Banks are creditors. Of course he prefers a story where government spending is dangerous and bondholders need to be kept comfortable. That’s a defensible position if he argued for it openly. Dressed up as a coming crisis with no real mechanism behind it, it’s just lobbying in a serious-sounding voice.

Why This Matters for Ordinary Americans

It would be easy to read all this as inside-baseball about bond markets and Federal Reserve operations. It isn’t. The fight over how the federal government can spend money is the most important fight in American political life right now, because it determines whether ordinary people get the basic foundation they need to live free, secure lives.

Here’s the connection. When Dimon and others succeed in convincing the public that federal spending must be limited because of “fiscal responsibility,” the programs that get cut are always the same. Healthcare. Social Security. Education. Housing. Childcare. Public infrastructure. The programs that give working families the breathing room to take risks, change jobs, start businesses, push back against bad bosses, organize, and demand better. The programs that create what I’ve called economic security. And economic security is the foundation of political independence. Without it, ordinary people can’t afford to resist exploitation, can’t afford to wait out a bad job market, can’t afford to challenge the powerful. They have to accept whatever terms they’re offered.

This is the trap I’ve written about before in *50 Years of Economic Myths Have Delivered Americans Into Technofeudalism*. Economic insecurity makes people politically exploitable. The more fragile your finances, the worse the deals you have to accept. The worse the deals, the more fragile you become. The cycle drives downward into something that looks less like democratic capitalism and more like feudalism with smartphones, where a small class of asset holders and platform owners rules over a much larger class of people who can’t afford to say no to anything.

The Strategy Behind the Damage

Once you see this clearly, Trump’s economic policies stop looking like chaos or stupidity and start looking like a strategy. The wreckage he’s causing to the dollar’s global standing isn’t a side effect of “America First” patriotism. It’s a tool for delivering the American consumer market into the hands of a small group of domestic oligarchs.

Think about what tariffs actually do when applied broadly and erratically. They don’t bring back high-quality manufacturing jobs. American factories can’t be rebuilt overnight, and even if they could, the tariffs are too unstable for any company to invest in the multi-year buildout that real reshoring would require. What tariffs do, immediately, is wall off the U.S. consumer market from foreign competition. They make imported goods more expensive or unavailable, and they push American consumers toward whatever is produced and sold by domestic firms. The smaller the field of competition, the more pricing power those domestic firms have. The fewer alternatives Americans have, the worse the deals they have to accept.

Now ask who actually controls domestic production and distribution at scale. The answer is the same handful of tech, finance, and platform oligarchs who have spent the last fifteen years consolidating control over American commerce. Amazon for retail. A few firms for groceries, pharmacies, and household goods. Tech platforms for software, services, and increasingly hardware. Finance and private equity for the rollups happening across health care, housing, veterinary services, dental practices, auto repair, and dozens of other sectors most people don’t realize have been quietly consolidated. Wall off the U.S. market from international competition, and these are the firms that get to set the terms.

The result is less competitive capitalism, not more. Higher prices, because there’s no foreign alternative to discipline domestic pricing. Worse quality, because consumers have nowhere else to go. Less choice, because the field of options shrinks to whatever the oligarch class decides to produce. And critically, weaker workers, because once foreign competition is gone and domestic firms are consolidated, employees lose their leverage too. If you don’t like working conditions at one of the three companies that dominates your industry, your alternatives narrow toward zero.

This isn’t a free market. It’s a captive market dressed up in the language of nationalism. And it’s the natural endpoint of the technofeudal project. Once a population is economically fragile (no savings, dependent on platforms, locked into debt), the final step is to make sure they can’t even shop their way out of bad deals by sourcing better goods and services from elsewhere. Tariffs do that. Damage to dollar reserve status does that. Hostility toward allies and trading partners does that. They aren’t separate policies. They’re a coordinated strategy to deliver American consumers into a closed market controlled by the same small class of oligarchs who already control most of American political and economic life.

What This Costs Ordinary Americans

The cruel irony is that ordinary Americans pay for this twice. They pay first through inflation on the imported goods and services they used to be able to buy more cheaply, and through the loss of choice and quality that comes from a market with less competition. They pay second through the weakening of the dollar’s global standing, which raises the relative cost of energy and everything tied to international markets, while the wealthy are insulated by the very assets (stocks, real estate, foreign currency, gold) that gain value when the dollar loses ground. Working families pay the bill for an elite-driven loss of dollar primacy, while the people who caused the damage walk away richer.

Meanwhile, the public conversation is hijacked by warnings about deficits and “fiscal responsibility” that misdirect attention away from the actual project. Every minute spent debating whether we can “afford” healthcare or paid leave is a minute not spent asking why the people who designed this captured market are also the people demanding that ordinary Americans accept less security and fewer public goods. Jamie Dimon’s bond crisis warning, whether he intends it this way or not, is part of the apparatus that keeps that conversation pointed in the wrong direction.

So when you hear “we need to be fiscally responsible” or “the deficit will cause a crisis,” ask who benefits from you accepting that framing. It isn’t you. It’s the same people who benefit from tariffs that wall off your market, from sanctions and chaos that weaken the dollar, from consolidation that eliminates your alternatives, and from a public conversation that keeps you focused on imaginary constraints while real ones are being engineered around you. The path to a country that works for ordinary Americans starts with refusing the false framings that have been used to keep us economically fragile and politically exploitable for half a century.

Asking Better Questions

The path forward starts with refusing the question Dimon is asking. At the national level, “can we afford it?” is the wrong question. Better questions are: Do we have the real resources? Will doing this cause prices to rise? Does it serve a public purpose? And who benefits from the framing being used to shut down the conversation?

When enough of us learn to ask those questions, the political landscape changes. The limits we’ve been told to accept turn out to be artificial. The choices we’ve been told are impossible turn out to be available. That’s not a radical claim. It’s what a Federal Reserve chairman said out loud in 1946. We’ve just spent eighty years pretending he didn’t.

References:

• Your Mainstream Economics Decoder Ring

• Federal Taxes Don’t Fund the Government: We’ve Known This Since 1946

• 50 Years of Economic Myths Have Delivered Americans Into Technofeudalism

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Trump says he can pay off $36 trillion in national debt by selling wealthy immigrants $5 million “gold card” visas. This is a perfect example of how the “national debt” mythology gets weaponized.

Here’s the thing most people don’t know: the U.S. hasn’t operated under a gold standard since 1971. Since then, we’ve been in what economists call a soft money regime... the federal government creates its own currency. It cannot involuntarily run out of dollars the way you or I run out of a paycheck.

That means the “national debt” isn’t a debt in any meaningful sense. There’s no payback liability. No creditor is going to repossess America. What we call the national debt is actually an accounting record of net dollars the government has spent into the economy and not taxed back. Those dollars are, dollar for dollar, private sector financial assets at home and abroad. (I explain the full mechanics here: chevan.substack.com/p/t…)

The U.S. has enjoyed a special status called “Global Reserve Currency” where the U.S. dollar is essentially the currency of the world. Trump has been destroying that status since he started his second term, with profound negative geo-political consequences to the world and negative economic consequences to the U.S.

Treasury securities, the thing people call “the debt”, are better understood as an investment product offered by the U.S. government that forms the stable base of the entire global credit system. If you want to understand why this matters: chevan.substack.com/p/w…

So when Trump says he needs to sell $5 million gold cards to “pay off” the national debt, the premise itself is nonsensical. You don’t need to pay off something that doesn’t function as a debt. And no, federal taxes don’t pay for government spending either... that’s another part of the mythology: chevan.substack.com/p/f…

A note on using ChatGPT to fact-check this: it won’t help. The discipline of economics itself is not scientific... it’s an ideology with math. Mainstream economics doesn’t practice falsification, it failed to predict the 2008 financial crisis, stagflation, and Japan’s lost decades, and it resolves disagreements through institutional power rather than evidence. ChatGPT is trained on this literature. Ask it about the national debt and you’ll get the orthodox answer back... the same answer that has been demonstrably wrong about deficits, inflation, and government solvency for decades.

You’re not getting a neutral analysis, you’re getting confirmation of the dominant ideology. To understand why the orthodox economics is wrong, you have to get into the actual mechanics of how money is created, how spending works, how inflation actually happens. That’s what I’ve tried to do in my essays. Conservative politics has spent 50 years corrupting the information landscape... including the entire discipline of economics... to justify austerity and wealth concentration. The economics you learned in school, the economics ChatGPT will give you, is the product of that corruption. (I wrote about exactly how and why here: chevan.substack.com/p/e… and what it would take to fix it: chevan.substack.com/p/h…)

The real question is: why create severe austerity... gutting agencies, slashing services, starving communities of capital to “pay off” something that doesn’t need paying off? You may not understand monetary operations and how fiat currency works but Trump and his advisors do. The answer is that austerity concentrates wealth. When you starve resources from ordinary people, the only ones who benefit are those with enough excess money and assets to weather the storm. That’s not fiscal responsibility. That’s neofeudalism... a modern version of lords and serfs, except the castle is a hedge fund. (More on where this leads: chevan.substack.com/p/5…)

The actual danger isn’t the national debt. It’s Trump threatening to default on or cancel it. This would destroy the credit markets that the entire global economy depends on.

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Trump attacked Mayor Mamdani this week. “TAX, TAX, TAX Policies are SO WRONG. People are fleeing.” The president of the United States publicly calling out a mayor for raising local taxes.

Here’s the part he gets right: Mamdani does have to tax to fund programs. NYC is what economists call a currency user. It runs on dollars it has to collect, borrow, or receive from the federal government. Cities and states have no other option.

Here’s the part he’s lying about: the U.S. government isn’t a currency user. It’s the currency sovereign. It issues the dollar. It doesn’t need tax revenue to fund anything... it just has to appropriate. This isn’t opinion. It’s how the monetary system has actually operated since 1971. I wrote about that here: chevan.substack.com/p/f…

Trump knows this. He just signed the One Big Beautiful Bill... an appropriation roughly the scale of what Biden passed. The money was there. It always is. The question was never “can we afford it.” The question was always “who gets it.” Biden appropriated for the CHIPS Act, infrastructure, the IRA, clean energy... investment in Americans. Trump appropriated for military escalation, ICE expansion, domestic surveillance, and enrichment for people in his orbit. Same tool. Opposite purpose. More on that contrast: chevan.substack.com/p/t…

Which brings us back to Mamdani. Mamdani has to tax New Yorkers because the federal government has chosen not to fund what cities are forced to fund locally. Trump is attacking Mamdani for the predictable consequence of Trump’s own governing philosophy. You’ll hear Trump say “let the states fund it” like that’s an answer. It isn’t. It’s the mechanism. He’s using the power of the currency sovereign to enrich himself and oligarchs while starving ordinary Americans of the resources to make their lives better. The hypocrisy isn’t a bug. It’s the whole point. More on how we got to neo-feudalism: chevan.substack.com/p/5…

Many conservatives cheer it on because they think he’s reducing wasteful spending and ending dependency on the government. He’s doing neither. The spending is the same size. It’s just pointed at different people.

And this is the part that should make every American furious: the same mythology Trump is using to attack Mamdani is the one that keeps Americans afraid of the national debt. We’ve been trained to believe the debt is a burden we’re passing to our grandchildren, that we have to pay it back, that it’s about to destroy us. None of it is true. The discipline of economics was captured decades ago by people who benefit when we believe we can’t afford what we could easily afford. They trained us to enslave ourselves with a fear that isn’t real... and to call that self-enslavement “fiscal responsibility.” More detail: chevan.substack.com/p/e…

If Americans understood that Congress could appropriate for universal healthcare, housing, childcare, or a Universal Basic Assets floor the same way it appropriates for wars and tax cuts... I suspect most of them would demand it. That’s why the mythology is maintained. A population that thinks “we can’t afford it” is a population that won’t ask for it. More on what we could actually build: chevan.substack.com/p/u…

This is what neo-feudalism looks like in real time. It runs on a lie about money, told by people who know better, to an audience conditioned not to ask. The national debt isn’t the threat. The mythology about it is.

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