Debt has always been the ruin of great powers. Is the US next?
Subscribe to enjoy similar stories. Is that the heady scent of hubris, wafting through the winter air of Washington, D.C.? So bold has President Trump been in the first month of his second term that nervous Europeans wonder if the American republic is now unabashedly an empire. Trump renames seas.
He reclaims canals. He demands Greenland. He trolls Canada.
His proposal for peace in Gaza is wholesale resettlement of its population. His plan for peace in Ukraine begins to look a lot like partition. In the ancient Hellenic world, hubris was the kind of pride or arrogance that led a mortal to defy the gods.
But hard on its heels there usually came Nemesis, the goddess of divine retribution. The historian prefers to exclude deities from his narrative. He discerns the more prosaic operation of budgetary constraints.
For it is these, not gods, that set limits on the geopolitical ambitions of republics and empires alike. What I call Ferguson’s Law states that any great power that spends more on debt service than on defense risks ceasing to be a great power. The insight is not mine but originates with the Scottish political theorist Adam Ferguson, whose “Essay on the History of Civil Society" (1767) brilliantly identified the perils of excessive public debt.
Ferguson understood what modern economists call the “tax-smoothing" properties of public debt: By borrowing to pay for a war or some other emergency, a government can spread the cost over multiple generations of taxpayers. But he also saw the catch. “The growing burden," he observed, is “gradually laid," and though a nation may “sink in some future age, every minister hopes it may still keep afloat in his own." For this reason, public debt is “extremely dangerous…in the hands
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