Arnold Carton recently had an excellent OP up comparing Donald Trump to Julius Caesar and noting that there is sometimes no turning back from Republican to dictatorial Imperial rule. Another less talked about aspect of the fall of the Roman Empire was the ruinous cost of conducting so many military campaigns with succeeding Emperors (who often only lasted a few months before being killed by rivals or their own men) simply issuing more currency to finance them.
Eventually the Roman currency collapsed and people had to resort to barter – resulting in much reduced trade and a far more inefficient economy. One of the main benefits of “Pax Romana” evaporated even as the costs increased.
One of the things few understand about US politics is the importance of deficit spending. It used to be that liberals were keen on public spending and were often accused of pushing up the deficit. Conservatives, on the other hand, had an almost religious and moral abhorrence of borrowing and insisted on the fiscal prudence of balancing the books. “Neither a Lender nor a borrower be.”
Modern conservatives have turned that on its head and have borrowed like there is no tomorrow (while opposing attempts to raise the debt ceiling by Democratic Presidents). Cheney famously told Bush that “Reagan proved that deficits don’t matter.” This gives the misleading impression that the economy, and Americans generally do better when Republicans are in power.
But it is all on borrowed money, often at increasing rates of interest, and it is the next President who cops the grief when the borrowing has to be repaid. GW Bush increased the national debt by over 100% and then the economy crashed. But Obama was prevented by Republicans from borrowing adequately to help the economy recover post crash, which meant the recovery was long, slow, and sluggish – for which Republicans gleefully blamed Democrats.
Biden was determined not to repeat that mistake post Covid, and the economic recovery from the shutdowns during the Pandemic was therefore much more rapid. But for all the Republican (and European right wing commentary) blaming him for massively profligate spending and increased inflation, he has in fact increased the deficit by less than any other recent President and the much touted prolonged period of stagflation never happened.
Moreover, Biden’s spending was on infrastructure, healthcare, promoting clean energy security and re-locating industrial production back to the USA – with Republican voting states benefiting most from new industries locating there – go figure. Republican tax cuts almost all go to corporations and the wealthy, so much so that virtually all the incremental increases in real wealth over the past 30 years have gone to the top 1%. Trickle down economics, how are you?
Somehow Republicans never get blamed for this, because their massive borrowing means everyone “feels” somewhat better off – until the debts have to be repaid – and by then its all the Democrat’s fault.
Trump has already had a row with Congressional Republicans who baulked at his request for a massive hike in the debt ceiling. He needs it to finance his promised tax cuts for corporations and the wealthy. Some hapless future Democratic president will end up having to implement austerity to pay the debt back.
Thus the myth that Reagan far outperformed Carter in his management of the economy. In fact Carter created 10 million new jobs in his term – twice what Reagan created in the following four years.. But Reagan also massively increased deficit spending on armaments and tax reductions for the wealthy, which meant that eventually many people felt better off.
As the world’s reserve currency, there is effectively no limit on how much the USA can borrow – absent Congressional restraint. The danger is that the currency becomes so devalued and debased that fewer and fewer people want to be exposed to US debt or conduct their business in Dollars. Hence Trump’s avowed hatred of the Euro and Chinese attempts at creating viable alternatives.
So the debt doesn’t matter until it does. In Ernest Hemingway’s novel, The Sun Also Rises, Mike Campbell is asked how he went bankrupt. He offers the sobering and famous line, “Two ways. Gradually, then suddenly.” The Roman Empire survived Julius Caesar by almost 400 years in the West, and another 1,000 years in the East, but it never returned to its republican roots and was sustained only by increasingly bloody wars. It was to be another 1,500 years before Europe had a common currency again.
Some things, once broken, can never be restored, or else can take a very long time to repair.
Frank Schnittger is the author of Sovereignty 2040, a future history of how Irish re-unification might work out. He has worked in business in Dublin and London and, on a voluntary basis, for charities in community development, education, restorative justice and addiction services.
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