Countries, like the ebb and flow of ocean waves, experience economic cycles characterized by micro and macro periods. Micro cycles manifest as regular fluctuations that can occur every few years, typically lasting for a decade or more, while macro cycles unfold over centuries. During macro cycles, nations undergo phases of prosperity when their citizens exhibit a diligent work ethic, investing in the economy through savings, purchases, and reinvestment. A critical factor contributing to a nation’s economic vitality is its degree of economic freedom; the less governmental oversight there is, the more conducive the environment becomes for economic advancement.
However, a nation’s economic prosperity is often undermined by governmental ambition for increased control over its populace and, eventually, neighboring countries. Governments frequently grow in reach and capacity, initially regulating their citizens and progressively expanding their ambitions through military interventions in foreign nations. Warfare, being the most financially taxing endeavor a country can undertake, often ends up being a catastrophic mistake as it typically leads to significant financial burdens, both from the costs of conflict and the need to borrow extensively to sustain military operations. This perpetual cycle of warfare often results in disastrous economic outcomes for the initiating nation.
Historically, we can see how military aspirations led to financial ruin for nations like Spain in the early 1800s. Once the foremost global empire, Spain ultimately crippled its economy after years of warfare across Europe. Heavy borrowing under King Charles III led to economic mismanagement, particularly the issuance of fiat currency in a bid to fund the Spanish colony of Louisiana. The sinking of the ship El Cazador, which carried much of Spain’s silver currency, symbolizes the disastrous culmination of economic miscalculation stemming from warfare and debt. Following decades of mismanagement, Carlos IV resorted to selling Louisiana to France, leading to a series of territorial transactions that reflected the turmoil in Spanish finances.
Similarly, Napoleon’s ambitions culminated in a dire financial situation for France when he sold Louisiana to the United States to alleviate his own burdens from prolonged warfare. His eventual defeat at the Battle of Waterloo further exemplified how warfare and the resultant debt can precipitate the downfall of even the most powerful regimes. In contrast, U.S. President Thomas Jefferson approached military engagement with caution, always wary of foreign entanglements and maintaining restraint against deep indebtedness. His strategy focused on careful borrowing and the preservation of economic stability, laying the groundwork for a thriving nation.
In the contemporary landscape, the United States finds itself embroiled in a pattern reminiscent of former empires, marked not just by frequent military engagements but also by soaring national debt. This scenario is particularly concerning due to the U.S.’s transition from the world’s leading creditor to its foremost debtor while actively engaging in military interventions across various nations. Unlike previous empires such as Spain and France, the United States lacks territories to sell off to mitigate its debts, positioning the nation in a dangerously precarious situation without viable means to rectify its financial missteps.
Looking forward, the trajectory suggests potential economic collapse for the United States, though the ramifications would not bring an end to the world but rather a transition of wealth and assets, as has been the case throughout history. As the United States approaches the limits of its economic cycle, there’s a palpable sense of inevitability regarding its decline from prominent global power to a diminished presence on the world stage. Observers may later identify seemingly minor events as the tipping points for this decline, emphasizing once again how warfare, debt, and economic mismanagement can converge, igniting a cycle of impermanence for nations throughout history.
