When American banks created and lent out over $8 billion in real estate loans to people unable to pay their mortgages, it lead to a terrible worldwide economic depression in 2007. The American union of states and the European Union faced a crisis and had to take action. The American government in Washington possessed a Congress with full constitutional power over a huge inflow of tax monies of more than  $4 trillion. It also received an inflow of billions of dollars yearly from US bonds sold worldwide mostly to foreign banks. Congress allowed one gigantic bank to fail and rescued another by borrowing $250 billion and loaning funds to it to save it. Between 2008 and 2012, the Federal Government borrowed almost $6 trillion to spend and stimulate economies nationally and internationally. President Bush in 2008 created a $168 billion stimulus package and President Obama created one in 2009 worth $787 billion. Federal Reserve Banks, banks of a central banking system independent of any government, dropped their discount rates for loans to banks so low that they were nearly giving out money free of charge to private American banks to use to back loans to businesses to stimulate the economy. The massive supply of money the US government injected into the American and worldwide economy drastically reduced the value of the US dollar. The European Central Bank of the European Union, located in the German nation-state, did the opposite. Germany fought pitilessly using the central bank’s power to force private banks in other states of the European Union to restrict credit and thus stop the needed expansion of the money supply. Germany forced other nation-state governments in the EU to reduce public spending benefiting their citizens and to introduce measures of austerity that eliminated jobs. The American central government acted like the head of a real union of states by creating and spending money massively year after year to stimulate its own economy and the world economy. Germany used the European Union as though it were not a union of states at all but just one big state ruled by Germany. It fought to control the value of its own wealth by refusing to devalue the Euro and thus create higher demand for products throughout Europe and more jobs. A union of states that has no independent central government constituted to use its power to aid all its states and instead can be manipulated selfishly by one state is not much more than an association of sovereign states of little value in an economic crisis.

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