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When Giants Fall
[E] conomic debt can lead to a sudden loss of military power and global respect, Ferguson said."By combating our crisis of private debt with an extraordinary expansion of public debt, we inevitably are going to reduce the resources available for national security in the years ahead, Ferguson said. Because as a debt grows, so the interest payments you have to make on it grow, even if interest rates stay low. And on current projections, the federal debt is going to be absorbing around 20 percent a fifth of all the taxes you pay within just a few years. The item of discretionary federal expenditure most likely to be squeezed is of course defense. And there are lots of historic precedents for that, said Ferguson, who is the author of Empire: The Rise and Demise of the British World Order and the Lessons for Global Power. Ferguson said the financial crisis that started in 2007 has has accelerated a fundamental shift in the balance of power, with the U.S. shedding power and China absorbing it. Ive just come back from China a two-week trip there and the thing I heard most often was, You cant lecture us about the superiority of your system anymore. We dont need to learn anything from you about financial institutions and forget about democracy. We see where it has gotten you. Blog Posted by: Besoeker 2010-07-11 |
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