This is the question New York Times columnist David Brooks. More from whom:
America is expected to spend $870 billion, or 3.1 percent of gross domestic product, on interest payments on the federal debt this year. According to the Committee for a Responsible Federal Budget, the government will spend more on interest payments than on the entire defense budget. If interest rates remain high, within three years, debt payments could become the federal government’s second-largest expense, after Social Security…
Soon you’re staring at Ferguson’s law. This is the principle proclaimed by historian Niall Ferguson: any country that spends more on interest payments on its debts than on military expenditure will decline. It happened to Habsburg Spain, the Ottoman Empire, the British Empire and pre-revolutionary France. Will it happen to us?
Yes – Mr. Brooks – it will happen to us.
If it does not happen to us, it will not come from prudence, forbearance or restraint.
It will be through serendipity. It will be through luck. Maybe even divine providence.
As the German Iron Chancellor Bismarck once noted:
“God has a special providence for fools, drunkards and the United States of America.”
We believe the old Prussian was hooked on something. As we have argued before…
The happiest nation on earth
God filled two oceans – one Atlantic and one Pacific – to cut off the United States from plunderers.
He placed two geopolitical bantamweights against the land borders north and south.
He blessed it with vast tracts of rich, fertile land… an extensive capillary system of internal waterways… natural harbors from which to ship supplies… and to take in supplies.
What other nation has enjoyed such natural, God-given wealth?
We struggle in vain to think of one. Cast your gaze around the world…
An England or a Japan can enjoy maritime insurance against invasion. Yet both countries are island states that lack essential resources. They are highly dependent on the import trade.
Germany inhabits the Northern European Plain. This plain is a defenseless and almost infinite expanse stretching from the English Channel in the west to Russia’s Ural Mountains in the east.
Geography is an enormously extensive pancake. Its flatness offers Germany little natural defense.
In the southwest lies formidable France. In the east the menacing Russian bear snarls.
France, meanwhile, is eternally vulnerable to the Germanic invasion. Just look at 1870, 1914 and 1940.
Poor Russia
Next we come to Russia. Like Germany, Russia is located on the open Northern European plain. This, of course, exposes her to Western invasion.
Messieurs Bonaparte and Hitler took full advantage of this vulnerability – the former in 1812, the latter in 1941.
And to the east?
The almost endless steppes of Russia stretch all the way to Mongolia. What is Mongolia best known for?
Genghis Khan and the Golden Horde of marauding horsemen who terrorized Eurasia.
Crossing these grassy seas, Mongol invaders besieged and conquered Russia.
Russia is therefore vulnerable to invasions from both the east and the west. History has demonstrated this fact to great effect.
Is it any wonder why Russia seems so paranoid about territorial transgression?
Is it any wonder why Russia is so jealous of its influence over Ukraine – and why the prospect of Ukrainian inclusion in the North Atlantic Treaty Organization freezes Russia’s blood?
Meanwhile: Despite Russia’s enormous size, the country is landlocked by winter ice that is choking its coasts.
What about China?
The kingdom of heaven
China believes that it is the Heavenly Kingdom, which is uniquely favored by God. Yet we are not half convinced that it is true.
It didn’t build its Great Wall for nothing.
And off the coast lies a chain of fortresses surrounding the land – South Korea, Japan, Taiwan, the Philippines – all allied with God’s chosen nation.
But let’s extend our investigation below the equator. What about Brazil?
“Brazil is the country of the future,” says the old saw – and “always will be.”
Large areas of it form a lawless jungle. There is a lack of arable land. The main cities are isolated dots.
The list of second and third reviewers remains.
No… God has put America on the throne of the earth.
God’s sense of humor
Has God given the United States a Baltimore… a Detroit… a Cleveland?
Has He populated the capital with an endless array of scoundrels, scoundrels, scoundrels, chisellers, swindlers, and swindlers?
Well, friends, maybe He did. Yet even God Almighty must be allowed room for error.
Maybe it’s not a mistake at all, but intentional.
We must admit the possibility that He has a mischievous, even mischievous sense of humor: this God.
That He delights in pulling noses and pulling chains.
Nevertheless, he has showered America with such enormous natural extravagance…
In quiet moments, often in the wee hours of the night, we are often surprised.
Why are we so fortunate to be allowed to dwell in this earthly Eden, this El Dorado, this Elysium?
Countless others in the various hells of the world are infinitely more deserving of this high honor.
Yet here we are. And here they are not. But to continue…
Why are we gambling with America’s future?
Only the Americans themselves could make a mess of this idyll designed by God.
And it looks like they’re determined to do just that. The aforementioned Brooks continues:
For example, the current high interest rate environment is already having an impact on the housing sector and making housing even more unaffordable.
The United States continues to borrow all this money, even though classical Keynesian theory tells us that we should borrow in times of recession, but that we should commit to debt reduction in times like these, when growth is good…
We continue to sink ourselves further into debt even as the baby boomer generation ages, making programs like Social Security and Medicare increasingly expensive. The federal government already spends $6 on seniors for every $1 on children, which isn’t exactly an investment in the future…
It is infinitely more difficult to get a bipartisan majority to cut spending or raise taxes on the bulk of Americans than it is to get them to spend it with borrowed money.
He concludes:
At a certain point, all this self-confidence starts to look like hubris or a rationalization for: we want to spend the money of the future on ourselves. Prudence is a boring virtue, but the sensible course is to put the United States on a more sustainable course. As the meme artists on the internet might say (in slightly more colorful language), you’re messing around with debt, and sooner or later you’ll find out.
Great nations, like great empires, nevertheless move in cycles – from rosy dawn, to high and cloudless noon, to dim sunset.
The United States is a kind of empire – although no one dares to say that word.
Perhaps we are merely witnessing an empire in decline, an empire in twilight.
“Empires have their own logic,” our own Washington and Jefferson – Bill Bonner and Addison Wiggin – wrote in Empire of debtin conclusion:
ldquo;That they will end in sorrow is a foregone conclusion.’
Unfortunately… even God’s divine providence is not eternal…
