The American government has been overspending for a decade. Over the last two years, that spending has kicked into overdrive. The budget deficit and national debt have hit crisis levels. Secretary of State Hillary Clinton has dubbed it a “national security issue.” She is correct in her assessment. Civilizations that overspend without modifying their habits collapse. Overspending has destroyed some of history’s greatest civilizations and empires including Han China, the Roman Empire, the French Empire, and the Soviet Union.
The Han were one of China’s greatest dynasties. The dynasty ruled for about four centuries from 206 B.C. to 220 A.D. Han rule is considered a golden age and their influence extends to the modern day. The majority ethnic group in modern China consider themselves “Han.” The empire enjoyed a thriving economy that reached Rome and India. The government spent on infrastructure improvements, tried to provide poor relief, and allowed merchants to engage in money making ventures. As time wore on, the government required more funds for their projects. Additionally, they wanted to control the largely autonomous large landowners.
In response to the need for cash and desire to control the upper classes, the government increased regulations, taxes, and spending. The Han even began nationalizing industries. Government actions crushed the merchants, led to deficit spending, and weakened the economy. Government debt increased dramatically weakening stability. Landowners grew stronger and the poor grew poorer. The government could no longer respond to threats inside and outside of China. The government decentralized and eventually collapsed under the weight of its economic policies.
Han China’s fall resembles that of the Roman Empire’s. The Romans built the greatest empire in history. The empire prospered from its founding in 31 B.C. until the third century. During the third century, the economy and political structure collapsed. Hyperinflation, currency devaluation, and overspending doomed the empire. Roman trade networks completely collapsed. Imperial contenders fought each other and spent personal and government money on soldiers. Eventually, the political situation settled, but the economy never recovered.
Diocletian ended the political turmoil in 284 and tried to restore the economy. His political solution lasted until 312 and his economic reforms never worked. Emperors struggled to maintain control throughout the fourth century. They spent tremendous resources on the military to defend themselves against upstarts and barbarian invaders. Taxes increased dramatically. People refused to work and the army requisitioned taxes in the form of foodstuffs. The empire could not afford the men to defend the borders. Eventually, the weight of spending crushed the empire and it collapsed in 476.
Roman emperors taxed their citizens as far as they could. The French kings taxed their citizens even further. The French court spent lavishly on themselves. Instead of building infrastructure and cultivating a climate friendly to economic development, they built palaces, fought several wars against Britain, and taxed their citizens in every conceivable way. The government even forced people to do manual labor as a form of taxation.
The French people suffered under the oppressive taxation. They also suffered from famine and malnutrition as a result of the Little Ice Age. As people starved and struggled to pay their taxes, the nobles lived unbelievably lavish lives. The government continued to spend freely. France teetered on the edge of economic collapse. When Louis XVI agreed to help finance the American Revolution, France went bankrupt. The national debt collapsed the system. Louis was forced to take drastic action. Events spiraled out of his control and the monarchy collapsed. The economic crisis that precipitated the French Revolution led to 26 years of bloodshed and instability in Europe.
Like Revolutionary France, the Soviet Union collapsed under the weight of debt. Throughout the Cold War period, the Soviets and United States engaged in an arms race and waged proxy wars across the world. By the late seventies, the Soviets appeared on the verge of victory in the Cold War. However, the invasion of Afghanistan and election of Ronald Reagan changed the dynamic and forced Soviet spending to unprecedented levels.
The Soviet economy spent billions fighting in Afghanistan. It became an economic and military black hole. The Soviets struggled to fight the American backed Afghan rebels. At the same time, President Reagan began an unprecedented peacetime military buildup. The Soviets felt compelled to try to keep up. The more dynamic American economy boomed while the Soviet economy sputtered. By 1989, the Soviets could no longer afford to keep their empire. They allowed the East European satellite nations to leave. In 1991, the U.S.S.R. itself collapsed under the weight of its debt.
The United States has not crossed the Rubicon yet. However, the government can no longer afford to keep running trillion dollar deficits. President Obama has added more to the national debt than every president from George Washington to Ronald Reagan combined. As a result, the Pentagon and even Obama’s own Secretary of State have declared the debt a national security issue. History proves this assessment correct.
