I’m surprised the debt ceiling is still an issue. Every year as the Treasury’s reserves run low, tension begins to build. The media, very helpfully, hypes up the situation by painting a picture of utter bleakness – either borrow another gazillion bucks or the economy will implode. Congress waffles, draws out the negotiating process, and then, usually right before the deadline hits, votes to raise the debt ceiling.
America’s debt problem is so big nobody really cares anymore. Josef Stalin, the late premier of the Soviet Union, said that “a single death is a tragedy; a million deaths are a statistic,” and he’s right in more than one way – America’s twenty trillion-dollar debt and four hundred-forty billion-dollar deficit simply don’t register with the average voter. They are both unfathomable, and as a result, even though we know that we’re in terrible financial shape, nobody – or at least not many – really wants to do anything about it.
We buy into the media narrative, by and large, even if we mentally reject it: “The economy will be fine; China would never sell our debt; our debt is just a sign of how good an investment we are; inflation is beneficial,” and so on. How many of us truly believe we will witness, in the very near future, a catastrophic economic meltdown? Probably not many. But as the politicians politician, and as the media medias, and as the taxpayers go about their daily lives feeding the government beast, it would be wise for us to look to the past. America’s debt problem is really symptomatic of a deeper issue: America’s spending problem. This is a disease that has brought down nearly every great civilization of old. Don’t believe me? Let’s look at the four centers of Western Civilization – Israel, Greece, Rome, and Britain.
“And the king made silver and gold at Jerusalem as plenteous as stones,” the Chronicler records. During his forty-year reign, Solomon raised Israel to dizzying heights of splendor, but he also sowed the seeds of its fall. The king’s monumental building projects and formidable military required huge amounts of capital, driving him to import vast amounts of gold and silver, debasing the currency until it was practically worthless. Suffering from high inflation and heavy taxes, the people revolted, dividing the kingdom and bringing an end to Israel’s Golden Age.
After their unlikely victory in the Greco-Persian Wars, the city-states of Greece enjoyed an era of unprecedented peace and prosperity. At the center of this “Golden Age” was Athens, which, under the rule of Pericles, became the cultural and commercial capital of the Western world. Much of Athens’ glory was owed to the stability of its coinage, which, as the “dollar” of Classical Greece, possessed a remarkable standard of purity. However, during the Peloponnesian War, Athens significantly devalued its currency to finance the war effort, and in the ensuing political and economic malaise, Macedonia conquered the weakened city-states and ended the independence of Greece.
Rome is perhaps the most striking example of overspending and political decline. Starting with Caracalla in the third century, the empire vastly increased both military pay and social spending, necessitating huge tax increases and a massive devaluation of the Roman currency. Prices increased tenfold, and toward the end, Roman coins were mostly lead and tin, with only a thin coating of silver or gold. Economic depression impoverished the Western Roman Empire and left them unable to fend off barbarian invasions from Europe and Africa.
For decades, the British Empire ruled over a Pax Britannica, a paragon of liberty and prosperity the world over. The pound was legendary for its stability – during the early twentieth century, economist Friedrich Hayek showed a student a British penny dating to the 1860s which he had recently received as change. But in 1914, Britain entered the Great War and abandoned the traditional gold standard; overspending engendered by both World Wars and the rise of the welfare state vastly debased the British currency. Struggling to balance the national budget, Britain’s leaders were in no position to maintain the Empire, and in only a few decades Britain had sunk from global power to disillusionment.
Israel, Greece, Rome, Britain – all great empires, all vastly influential. Yet each nation fell through a combination of overspending enabled by currency debasement. And how is America different?
America’s got a spending problem, but it’s not confined to just one or two areas. It’s holistic. What is remarkable – and what most conservatives fail to realize – is that the four great civilizations listed fell almost, though not quite, exclusively because of military spending! Solomon broke God’s command not to acquire many horses, accruing over four thousand for the Israelite war machine. The decline of Classical Greece was due to military, not social, expenditure, and while conservatives love to point out the “bread and circuses” aspect of the Roman welfare state, they don’t realize that the primary emphasis on overspending was burgeoning military pay, which under Caracalla rose fifty percent! Britain is no exception to this theme – it was the World Wars, not the welfare state, that drove Britain’s finances over the brink.
It is unlikely that Congress (or Trump, for that matter), will do anything to rein in America’s spending problem. Rather, we will continue to waste trillions of dollars both on fighting poverty and prosecuting needless foreign wars. The Federal Reserve will continue its job of devaluing the dollar, which has already lost more than ninety-five percent of its value over the past century (contrast this to the 1800s, when the value of the dollar rose by half!). And for America it will be business as usual, just as it was in Israel, Greece, Rome, Britain, and any other great civilization of the past.
What more is there to say?