Speaking of negative spill-over effects...

There are the legacy effects of the Cold War, with its assignments in the international "division of labor". Thus, in the U.S.A., the political-economic mentality developed that government efforts should be directed toward military industries, as quintessentially type A business, even if marked by the inverted incentives of cost-plus contracting, and their integration into both the overall management of the economy and the incentives of the political system, together with the Manichean ideology that the accumulation of overkill constituted the national purpose. In Europe, the organization of governmental efforts was directed toward "modernization" qua the pacification of national and class conflict. The inertial result is that demographically constrained Europe is caught up in the stagnation of maintaining its standards, whereas in the U.S.A. the alleged requirements of military Keynesianism and its ideological gambits have gobbled up more and more of the social and economic infrastructure, as the accumulation of military means must imply the need to use them. In the U.S.A. nowadays, military expenditures are more than half of the discretionary federal budget and larger than the budget deficit and the military, as the only well-financed branch of government, increasingly amounts to a state-within-the-state and assumes more and more of the functions of government. Assuming the dollar crash and sharp recession scenario, of course, that will be unsustainable, since the coming stagflation will make both tax increases and budget cuts necessary, and the diminishing returns of our political-economic reliance on the military have crowded out the needed repairs to our social infrastructure and external economic balances. And in the meantime, the international framework for redressing such imbalances, allowing for growth in the developing world, and dealing with newly emergent power relations and issues has been frayed beyond recognition. (Just note the agreement of Rumsfeld with the Japanese today and the Chinese reaction to it, as a small taste of problems to come.) So if the U.S.A. really is entirely dependent on type B business activity, its capacity to organize and maintain them will diminish.

I do have a question about Bretton Woods though. I've read that its adjustable-peg system, the brainchild of Keynes and that commie traitor Gordon Dexter White, was intended precisely to facilitate and expand international trade without inviting free flows of capital. The Bretton Woods era was, of course, mysteriously the time of unprecedented economic development and prosperity in the world, since the advent of international capitialism. Since Nixon unilaterally scuttled the arrangement and market-driven floating exchange rates have ruled, not only has the global economy slowed, but it has become increasingly financialized, as well as, dollarized. Could that be because the resulting free flows of capital have undermined the domestic control of governments over their economies and their corresponding ability to coordinate with each other internationally, in favor of the interests of capital, and the growth in the markets for financial instruments represents the functionally equivalent alternative to the risk-management capacities of governments?