Carrying America Forward: With the Prospect of the Financial Insolvency of the United States Becoming More Likely with Every Dollar Added to the U.S. Deficit, Americans Worry about the Country's Future

Article excerpt

How is the hammer of the whole earth cut asunder and broken! How is Babylon become a desolation among nations!

--Jeremiah 50:23

It is a historical commonplace that great empires fall. From Babylon and Rome to Ottoman Turkey and the British Empire, all of these, the greatest works of the hands of man, have equally perished with the march of centuries.


In some instances, the fall has been sudden and dramatic--the collapse of Achaemenid Persia under Alexander the Great's advancing armies, for example--while in others, the decline has been more gradual, spanning generations of internal instability and external contraction; the Western Roman Empire, Venice, and Byzantium all followed such trajectories. For some great states and civilizations, collapse was absolute, leaving little in its wake besides physical monuments (the Indus Valley and Mayan civilizations, for example). For others, the disintegration or military defeat of one polity led to replacement by another (Byzantium by the Ottomans), or to contraction from imperial behemoth to compact, still-intact state (post-imperial Great Britain and Sweden).

At the end of the last millennium, all the talk among almost everyone paying attention to current events--especially since 9/11 and the onset of the Great Recession--has been of the long-term viability of the United States of America. Given the certainty of terminal decline, sooner or later, is America's time as the dominant power on the world stage coming to an end? And does this latest time of troubles, with the federal government willing to take on unprecedented levels of debt to expand its own powers and to stave off private-sector bankruptcy of the People Who Matter, spell the beginning of the end for the American miracle?

Niall Ferguson, Harvard University's Laurence A. Tisch Professor of History, appears to think so. In the December 7 Newsweek cover story, "An Empire at.Risk," Ferguson observed that the decline of great powers always follows the same track:

Charles Scaliger is a teacher and freelance writer

It begins with a debt explosion. It ends with an inexorable reduction in the resources available for the Army, Navy, and Air Force. ... If the United States doesn't come up soon with a credible plan to restore the federal budget to balance over the next five to 10 years, the danger is very real that a debt crisis could lead to a major weakening of American power.

Ferguson, an authority on the history of money, trots out plenty of examples to support his basic premise, that "history strongly supports the proposition that major financial crises are followed by major fiscal crises." Habsburg Spain went down that road prior to the decisive military defeat of the Spanish Armada in 1588, an event that set the stage for the ascendancy of the British Empire. So did prerevolutionary France, which first became addicted to lavish spending on social programs and public works during the reign of Louis XIV, only to have its public and private finances repeatedly hamstrung by great economic upheavals in the 17th century--the South Sea and Mississippi bubbles in particular--that drained government coffers. By the eve of the French Revolution, Ferguson reminds us, 62 percent of royal revenue was being spent on debt service. The Ottomans in the final decades of their declension were paying over 50 percent of the budget on interest payments and amortization, while the British were shelling out 44 percent of their budget in the '30s, making re-armament to match the ascendancy of the Third Reich nearly impossible. National debt, the real destroyer of empires--long before invading hordes or unruly mobs have their say--has humbled many previous hegemons. And now, with the United States looking at total debt obligations of more than 100 percent of the GDP for the foreseeable future, our turn may be coming.

A Look at the Score

First, a sobering look at the statistics. …