“Why Are We Gambling With America’s Future?”

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“Why are we gambling with America’s future?”

This is the question of New York Times columnist David Brooks. More from whom:

America is expected to spend $870 billion, or 3.1 percent of gross domestic product, this year on interest payments on the federal debt. According to the Committee for a Responsible Federal Budget, the government will spend more on interest payments than on the entire defense budget. Within three years, if interest rates remain high, payments on the debt could become the federal government’s second-largest expenditure, behind Social Security…

Pretty soon, you’re staring at Ferguson’s Law. This is the principle enunciated by the historian Niall Ferguson that any nation that spends more on interest payments on the debt than on military spending will slip into decline. It happened to Hapsburg Spain, the Ottoman Empire, the British Empire and prerevolutionary France. Will it happen to us?

Yes — Mr. Brooks — it will happen to us.

If it does not happen to us… it will not be because of prudence, forbearance or restraint.

It will be because of serendipity. It will be because of luck. Perhaps even divine providence.

As Germany’s iron chancellor Bismarck once noted:

“God has a special providence for fools, drunkards and the United States of America.”

We believe the old Prussian hooked onto something. As we have argued before…

The Luckiest Nation on Earth

God filled two oceans — one Atlantic, one Pacific — to moat the United States off from marauders.

Against its land borders north and south He positioned two geopolitical bantamweights.

He blessed it with vast tracts of wealthy, fertile land… an extended capillary system of internal waterways… natural harbors from which to send items out… and to take items in.

What other nation has enjoyed such natural, God-granted riches?

We struggle in vain to conceive of one. Cast your gaze around the world…

An England or a Japan may enjoy maritime insurance against invasion. Yet each is an island nation lacking critical resources. They depend heavily upon the import trade.

Germany inhabits the North European Plain. This plain is a defenseless and nearly infinite expanse stretching from the English Channel in the West clear through to Russia’s Ural Mountains in the East.

The geography is a massively extended pancake. Its flatness affords Germany little natural defense.

To her southwest lies formidable France. To her east snarls the menacing Russian bear.

France — meantime — is eternally vulnerable to Germanic invasion. Look merely to 1870, 1914 and 1940.

Poor Russia

Next we come to Russia. Like Germany, Russia sits on the open North European Plain. This of course exposes her to western invasion.

Messieurs Bonaparte and Hitler exploited fully this vulnerability — the former in 1812 — the latter in 1941.

And to the east?

Russia’s nearly infinite steppes stretch clear through to Mongolia. For what is Mongolia best known?

Genghis Khan and the Golden Horde of marauding horsemen who terrorized Eurasia.

Crossing these grassy seas, Mongol invaders besieged and conquered Russia.

Thus Russia stands vulnerable to invasion from both east and west alike. History has demonstrated this fact to high effect.

Is it any wonder then why Russia appears so paranoid of territorial transgression?

Is it any wonder why Russia is so jealous of its influence over Ukraine — and why the prospect of Ukrainian absorption into the North Atlantic Treaty Organization freezes Russia’s blood?

Meantime: Despite Russia’s vast bulk it is boxed in by winter ice that chokes its coasts.

What of China?

The Celestial Kingdom

China believes it is the Celestial Kingdom, uniquely favored by God. Yet we are not half-convinced it is true.

It erected its Great Wall for a reason.

And off its coast lurks a chain of fortresses that bottle it in — South Korea, Japan, Taiwan, the Philippines — all of which ally with God’s chosen nation.

But let us extend our investigation beneath the equator. How about Brazil?

“Brazil is the country of the future,” runs the old saw — and “always will be.”

Large hunks of it are lawless jungle. It lacks arable land. Its primary cities are isolated dots.

The list of second- and third-raters runs on.

No… God has sat America upon Earth’s throne.

God’s Sense of Humor

Has God given the United States a Baltimore… a Detroit… a Cleveland?

Has He populated its capital with an endless roster of rogues, rascals, cadges, chiselers, grifters and swindlers?

Well, friends, maybe He has. Yet even God Almighty must be granted space for error.

Perhaps it is not error at all — but intention.

We must concede the possibility that He has a mischievous, even puckish sense of humor, this God.

That He delights in pulling noses and yanking chains.

He has nonetheless showered America with such immense natural extravagance…

In quiet moments, often in the small hours of night, we often marvel.

Why are we so fortunate as to reside in this earthly Eden, this El Dorado, this Elysium?

Countless others in the world’s various hells are infinitely more deserving of this high honor.

Yet here we are. And here they are not. But to proceed…

Why Are We Gambling With America’s Future?

Only Americans themselves could make a botch of this God-hatched idyll.

And it appears they are determined to do precisely that. The abovesaid Brooks continues:

Today’s high interest rate environment is already hammering, say, the housing construction industry and making housing even more unaffordable.

The United States continues to borrow all this money even though classical Keynesian theory tells us to borrow in times of recession but commit to debt reduction in times like these, when growth is good…

We continue to go further into debt even though the baby boom generation is aging, making programs like Social Security and Medicare more and more costly. The federal government already spends $6 on senior citizens for every $1 on children, which is not exactly investing in the future…

It is infinitely more difficult to get bipartisan majorities to cut spending or raise taxes on the bulk of Americans than it is to get it to spend with borrowed money.

He concludes:

At some point all this self-confidence begins to look like hubris or a rationalization for: We want to spend the future’s money on ourselves. Prudence is a boring virtue, but the prudent course is to get the United States on a more sustainable course. As the meme artists on the internet might say (in slightly more colorful language), you mess around with debt, and sooner or later you’ll find out.

Great nations, like great empires, nonetheless run in cycles — from rosy dawn, to high and cloudless noon, to twilit sundown.

The United States is an empire of sorts — though none dare say the word.

Perhaps we are merely witnessing an empire in decline, an empire in twilight.

“Empires have a logic of their own,” wrote our own Washington and Jefferson — Bill Bonner and Addison Wiggin — in Empire of Debt, concluding:

ldquo;That they will end in grief is a foregone conclusion.”

Alas… even God’s divine providence is not eternal…

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