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"More Empires Have Fallen Because Of Reckless Finances Than Invasion"
While Eric Margolis' entire comment in the Toronto Sun is a must-read, the following two quotes really hit the nail on the head:
More empires have fallen because of reckless finances than invasion...
If
Obama really were serious about restoring America’s economic health, he
would demand military spending be slashed, quickly end the Iraq and
Afghan wars and break up the nation’s giant Frankenbanks.
Margolis is right.
As I have repeatedly shown, war is bad for the economy. According to a Nobel prize-winning economist, the head of JP Morgan and others, the Iraq war and the war on terror in general were huge factors in destroying our economy.
America is a dying empire, destroying the last of its resources to fight unnecessary wars.
Instead of rebuilding our economy so that we can once again be a strong
nation, we are wasting trillions fighting those unnecessary wars, thus guaranteeing that we do not have the economic resources to defend ourselves in the future from real threats.
Don't believe me?
Well, our military and intelligence leaders say that the economic crisis is now the biggest threat to America's national security.
And as leading economic historian Niall Ferguson recently wrote in Newsweek:
Call
the United States what you like—superpower, hegemon, or empire—but its
ability to manage its finances is closely tied to its ability to remain
the predominant global military power...This is how empires
decline. It begins with a debt explosion. It ends with an inexorable
reduction in the resources available for the Army, Navy, and Air
Force...If the United States doesn't come up soon with a
credible plan to restore the federal budget to balance over the next
five to 10 years, the danger is very real that a debt crisis could lead
to a major weakening of American power.
The precedents are
certainly there. Habsburg Spain defaulted on all or part of its debt 14
times between 1557 and 1696 and also succumbed to inflation due to a
surfeit of New World silver. Prerevolutionary France was spending 62
percent of royal revenue on debt service by 1788. The Ottoman Empire
went the same way: interest payments and amortization rose from 15
percent of the budget in 1860 to 50 percent in 1875. And don't forget
the last great English-speaking empire. By the interwar years, interest
payments were consuming 44 percent of the British budget, making it
intensely difficult to rearm in the face of a new German threat.
Call it the fatal arithmetic of imperial decline. Without radical fiscal reform, it could apply to America next.
And William R. Hawkins (formerly an economics
professor at Appalachian State University, the University of North
Carolina-Asheville, and Radford University) fills in some details on the fall of the Hapsburg empire:
Spain The Hapsburgs went into decline in the 17th The demands of empire required a strong and growing Spanish imports were double exports and the precious Yet, Historians Where there were jobs and prosperity, there Today,
was the first global Superpower...With Spain as its political base, and
gold and silver flowing in from its American colonies, the Hapsburg
dynasty became the dominant power in Europe. It controlled rich parts
of Italy through Naples and Milan, and Central Europe from the
Netherlands through the Holy Roman Empire to Austria. In the 16th
century it added the far distant Philippine islands to its empire. The
Hapsburgs held off the Ottoman Turks, whose resurgent wave of Islamic
conquest in the 16th century swept across the Balkans and nearly
captured Vienna.
century, and while any such momentous event has many causes, for our
purposes the focus will be on the economic collapse of Spain, which not
only sapped the empire of strength but served to build up the power of
its rivals.
economy, but Spain did not keep up with the economic expansion that was
taking place in other parts of Europe. Madrid’s financial base fell out
from under its empire. Spain could continue to consume in the short
term because of the flow of precious metals from American mines, but it
could not produce the goods it needed at home, which in the long-run
proved fatal to its standing as a Great Power and as an advanced
society.
metals became scarce within weeks of the arrival of the American
treasure fleets as the money flowed to Spain's many creditors. What
industry there was, along with banking and shipping, was in the hands
of foreign owners. As a modern historian, Jaime Vicens Vives, has
concluded, “This was one of the fundamental causes of the Spanish
economy's profound decline in the seventeenth century, maritime trade
had fallen into the hands of foreigners.” This, plus the “opening of
the internal market to foreign goods,” produced a “fatal result.”
Spain's exports were at the same time under heavy pressure by
competitors in third country markets. A nation that cannot control its
domestic market will seldom be able to sustain itself in foreign
markets, which are inherently less accessible and more unstable.
Spanish leaders were deluded by a sense of false prosperity. This is
testified by the statement of a prominent official, Alfonso Nunez de
Castro in 1675: “Let London manufacture those fine fabrics of hers to
her heart's content; let Holland her chambrays; Florence her cloth; the
Indies their beaver and vicuna; Milan her brocade, Italy and Flanders
their linens...so long as our capital can enjoy them; the only thing it
proves is that all nations train their journeymen for Madrid, and that
Madrid is the queen of Parliaments, for all the world serves her and
she serves nobody.” A few years later, the Madrid government was
bankrupt. The Spanish nobleman had foolishly elevated consumption, a
use for wealth, above production, the creation of wealth.
have traced the flow of Spanish gold and silver across the markets of
Europe. Those who “served” Spain by establishing industries to
manufacture goods for the Spanish market gained the money. Spain’s
rivals, France, Holland (which started a successful revolt in 1568) and
England, prospered by their trade surpluses, and reinvested the money
to expand their own capabilities. Another modern expert on Hapsburg
history, Henry Kamen, has cited contemporary sources who referred to
17th century Spain as “the Indies for the foreigner.” The military
empire of the Hapsburgs became the economic colony of other powers, or,
to use a current phrase, Spain was the “engine of growth” for the rest
of the continent.
was also rapid population growth, and rising tax revenue. Rival powers
were able to field and finance military forces that could defeat the
once superior Spanish forces both on land and at sea. The irony of this
is that Spain was ruled by a warrior aristocracy tempered by centuries
of constant warfare against Islamic hordes and Christian heretics.
These nobles looked down on merchants and manufacturers and disparaged
their mundane professions only to find that without a strong domestic
business class they could not afford the fleets and armies that guarded
the empire they had built.
the American “empire” is also trying to consume more than it produces.
The U.S. trade deficit is nearing Spain’s nadir of imports being double
exports. Both government spending and private consumption are financed
heavily by debt. Washington is printing money, the modern equivalent of
digging gold out of the ground, rather than earning the means to pay
its bills. And the political and military elites are apparently
indifferent to the fate of domestic business and industry. Americans must learn ... from the Spanish experience ... and take corrective action while they still can.
As for the need to break up the "Frankenbanks", see this.
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And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
--- Thomas Jefferson wrote on May 28, 1816
www.britannica.com/presidents/article-9116907
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"Give me control over a nations currency, and I care not who makes its laws"
--- Baron M.A. Rothschild, same guy who helped create the central banking system used today.
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"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold... Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
--- Alan Greenspan
'Gold and Economic Freedom' (1966)
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So ZH'ers this is nothing new.