US Structural Power and the Internationalization of the US Treasury

Abstract

All too often the US Treasury has been portrayed as an instrument of the Wall Street financial community in international affairs. Yet the important connection that does exist between financial capital and the US Treasury needs to be seen in structural more than instrumental terms. The Treasury’s central responsibility is financing the American state through taxation and borrowing. Its exclusive role in debt management brings it into close contact with financial markets (where government securities are floated) and in effect means that the Treasury, while a part of the state, is also a very important part of the market. In the international sphere, where the Treasury’s main role is maintaining and managing the international standing of the US dollar, the connection with Wall Street is no less intimate. Indeed, it is the Treasury’s management of the national debt in globalizing American financial markets that shapes the Treasury’s role in managing the dollar globally.