Recommended: An Empire at Risk

Niall Ferguson is a professor of history at Harvard and most recently the author of The Ascent of Money, which is quite a good book. He also wrote The Pity of War: Explaining World War One (1998), and the two-volume set The House of Rothschild (also 1998). His article An Empire at Risk in the upcoming issue of Newsweek is long and detailed, but well worth reading. There is little question that the government's profligate spending over the past few decades, culminating in the heart-stopping $1.4 TRILLION deficit this year, is unsustainable. And it appears that this Congress, believing (correctly or incorrectly) that the last election gave it a mandate to implement all the liberal programs that the Democratic Party has hoped for for years, is ideologically incapable of cutting government spending and raising taxes to begin to pay off the national debt, or even to reduce the annual deficit.

In the end it is economic power that is at the base of all international power. Without economic power, nations can't afford the military power needed to defend their national interests. Without economic power, nations can't afford the investments in education and innovation that make their citizens highly productive. Without economic power, nations can't afford to build and maintain the complex infrastructure that a modern society needs. Without economic power, nations can't afford the continuing capital investment needed to maintain their economic power.

Ferguson argues that we in America are in danger of losing our economic dominance in the world because of our unwise government policies - most particularly our inability to be realistic about our finances. The government for decades, under both parties, has spent far more than it takes in, yet has been unable to summon the political will to raise taxes and/or cut government spending. Yet these are the only two options available to reverse our increasing indebtedness.

A sobering argument.