When you look at what’s going on in Greece and Spain with all the violence and protests you can see what happens when the government starts talking about tax increases and benefit cuts. Why would anyone believe that things will be any different in the United States?
The Roman Expire took 500 years to build. There were 300 years of prosperity and 200 years of decline.
The American Empire took 200 years to build. There’s been almost 75 years of prosperity. How long will it take to decline? I think it may take less than 25 years.
Things are different and in some ways not for the better. When Rome was an Empire, information moved a lot slower. People on one side of the Empire knew little about what was going on on the other side.
Today the world has instant access to information. As was demonstrated in the past, information is the key. It was the printing press that dragged Europe out of the dark ages and into the age of enlightenment.
It’s been suggested that the U.S. may be able to get itself out of financial difficulty via war. War is good for an economy – isn’t it? I believe it used to be but I’m not so sure anymore.
Before Fiat money (money that derives its value from government regulation or law), war was used to create economic activity which was good. It also leads to “spoils”. In centuries past that may have been in the form of slaves or gold. Today it may be in the form of oil but what if the war is being waged isn’t against a country at all but against a ghost?
The American war on terror is being totally financed by Fiat money. There isn’t going to be any “spoils” and as far as an increase in economic activity – well I don’t think there are any positive gains when it’s all a result of borrowed money.
How are the American people going to react when their government starts to cut their benefits (as reflected in their social programs like Social Security and Medicare) or increase their taxes to pay the bills? Always remember that money borrowed has to be paid back – with interest.