Editor's note: William Jones is the former White House correspondent for Executive Intelligence Review and a non-resident Fellow at Chongyang Institute for Financial Studies, Renmin University of China. The article reflects the author's opinions and not necessarily the views of CGTN.

In the light of the incredible hype in Washington about alleged "war plans" by Russia with the deployment of Russian troops on the border of troubled Ukraine, the Biden Administration is now threatening to impose draconian sanctions on them if they make any move into Ukraine. And irate members of Congress are talking glibly about a repeat of Munich 1938 if sanctions do not soon go into effect.

These people don't seem to understand the first thing about economics, much less about history. The fact is that the present world financial system, which is overloaded with a tremendous amount of outstanding debt, most of which cannot be covered by any real assets in the physical domain, is, in fact, a massive pyramid of debt claims, payments on which must be made at regular intervals, in order for the entire system to continue to function. Any serious default, or, for that matter, any major physical disruption, of the supply or energy chain, will have ripple effects throughout the entire system. And there are really no regulatory measures in place at the international level to deal with a major disruption somewhere along the line.

And yet, the U.S. government is now threatening measures that could effectively cripple an important "link" in the world financial chain. If sanctions lead, as they are intended, to non-payment of some important outstanding debts by Russian or other firms, the reverberations would quickly be felt in London and New York, and could very well send the markets into a real tailspin.

What those geopolitical "masterminds" in the nation's capital don't seem to understand is that we are no longer living in a world in which any nation's economy is solely dependent on what that nation itself produces. The worldwide division of labor is the basis on which the well-being of every American depends. And consciously attempting to sabotage a key part of that would be like shooting oneself in the foot – or in the head.

The same goes for the physical economy. Russia is a major producer of oil and gas. And while the United States is not directly dependent on Russian supplies, the Europeans are. While the energy sector is not now being targeted, it does remain an option under consideration. President Joe Biden is presently working overtime to get Qatar to take up the possible "slack" for Europe if Russian oil ceases to flow as a result of these "killer sanctions," but you can't just snap your fingers and suddenly come up with a million or so barrels of oil needed to supply western and eastern Europe. We have already seen the significant difficulties associated with the attempt to "rearrange" supply chains in a bid to cut China and Russia out of the supply-chain loop.

In addition to the harm that the sanctions will cause for the general population in Russia, which will no doubt increase anti-American sentiment among ordinary people in the country, it will also have a serious blowback on U.S. firms, particularly those in the energy sector. U.S. energy companies are already doing some heavy lobbying in Congress about the threat of sanctions to make sure that things don't get out of control.

Such measures, however, will also have serious implications for the living standards of Americans and could lead to a rapid decline in the already low level of trust in the Biden administration. One can only go so far in playing on some alleged anti-Russian or anti-Chinese "mood" in the U.S. population to rally support.

The greatest concern among Americans today, however, is trying to get the economy back on track amid the COVID-19 crisis. If the Biden administration can't deliver on this, and economic sanctions will make this more difficult, this could lead to drastic losses for the administration as early as congressional elections this fall.

And the blunt manner in which the whole question is being handled continues to raise concerns among the U.S.'s European and other allies who seem to think that the U.S. has somehow lost its way. Judging from the ever more strident tone taken by the Biden administration with regard to both China and Russia, it looks like it has. What is being portrayed as political "toughness" by Washington is increasingly seen as small-minded pettiness by the rest of the world, and a sign of pure desperation over the fact that the world is no longer marching to the rather discordant trumpet sounding in Washington.

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