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Section 3 — The Global Financial Order 6 discussion questions

Session 11 Discussion: Governments, money, and war

Governments use money as a weapon — in war, in diplomacy, and in domestic politics. Use these questions to discuss the relationship between financial power and political power.

Question 1

How does a government pay for a war when it cannot raise taxes fast enough? What are the long-term economic consequences of sustained military spending on ordinary citizens?

Try to use: war bonds, deficit spending, money printing, inflation tax, national debt

Question 2

Economic sanctions cut countries off from the global financial system. Are they an effective and ethical alternative to military force — or do they primarily hurt ordinary people rather than governments?

Try to use: financial sanctions, SWIFT exclusion, asset freeze, civilian impact, leverage

Question 3

Throughout history, governments have debased their currencies — reducing the gold or silver content of coins — to pay their debts. Is modern quantitative easing a form of the same thing?

Try to use: currency debasement, money printing, inflation, purchasing power, historical parallel

Question 4

What is a sovereign wealth fund? Name a country that has one. How does it give that government long-term economic and political power that others lack?

Try to use: resource wealth, long-term investment, Norway, Abu Dhabi, strategic asset, intergenerational

Question 5

The petrodollar system — oil priced in US dollars — gives the United States enormous global power. What would happen to American power if oil were priced in a different currency?

Try to use: dollar demand, reserve currency, petrodollar recycling, geopolitical leverage, dollar hegemony

Question 6

Can a country go bankrupt? What actually happens when a government defaults on its debt — name a real example. Who loses, who gains, and what comes next?

Try to use: sovereign default, debt restructuring, Argentina, Greece, IMF bailout, austerity