Collapse Theory Part I

All empires rise and fall. The Roman Republic, followed by the Roman Empire, lasted a thousand years, whereas the Ottomans survived six centuries. Britain was an empire for three hundred and sixty years. That was an eternity compared to the seventy-four years the Soviet Union enjoyed. If it hasn’t become apparent already, the lifespans of empires are shrinking. Whereas the Romans were able to maintain their power and influence for a whole millennium, the Soviets lasted less than a century. Technology is the primary culprit. Just as technology has accelerated the speed in which we advance, it has also sped up the time it takes for empires to decline. This fact should concern anyone living in Washington, but the reality is that most Americans believe the U.S.’s star is still rising. That America could never fall. In truth, on our television sets, we are witnessing its collapse.

I can imagine what you are thinking: but Ryan, unemployment is at an all-time low, particularly among minorities. The stock market is booming. We have never seen highs like this before. Actually, we have. Both in 2007, just before the 2007-8 Global Financial Crisis, and on October 23, 1929, the day before Black Thursday hit. That was the day when the stock market crashed, and the world fell into the Great Depression. Even if this wasn’t the case, it doesn’t matter. The issues that should concern us are systemic. America is doomed, and there is nothing Trump has done that will change this fact. If anything, the things he has done has made matters worse, but that’s irrelevant. America is still doomed. Whether it’s five minutes from now or five years doesn’t change the facts.

Now, what do I mean by doomed? I believe that not only is it inevitable for empires to collapse but that they can do so in two ways: hard and soft. A hard collapse is where the quality of life for the people in the empire drastically decreases. This is because the infrastructure necessary to maintain it (i.e., plumbing, and paved roads) has been lost, as well as the institutions that sustain civil society. Typically, a hard collapse happens because the empire in question has expanded too far and too quickly while also not making the needed investment to maintain the territory it already controls.

The western half of the Roman Empire is a perfect example of this. In 476 A.D., Rome was conquered by invading Germans. Almost overnight, society fell. Literacy rates plummeted until virtually no one knew how to read, and professions like pottery and masonry disappeared. No one had the skills needed to maintain the plumbing that made Rome the envy of the world. People started to throw their waste onto the streets. Paved roads transformed into roads of dirt. The life expectancy of the average person was 31.3 years. Before that, it was 35. Still low by today's standards, though this was mainly due to high child mortality rates. In Roman times, if you could reach the age of ten, you could expect to live until your 40s or 50s. However, during the dark ages, you had to reach 20 before your chances improved.

In a soft collapse, the standard of living doesn’t drastically decrease, but the empire’s power and influence wains. It’s not something to worry about. It's like undergoing a detox. Before, you were an empire. Now, you’re not. The eastern half of the Roman Empire is an example of this. The Byzantine Empire survived until 1453 A.D. when the Ottoman Empire stormed Constantinople. A modern-day case would be the British Empire. Great Britain is a society with high literacy rates, a dynamic economy, and a decent defense force, even though it hasn’t been an empire since the 1960s. It ceased to be one because it could no longer sustain the endless wars needed to maintain it. This is what triggers a soft collapse: prolong conflicts where the empire gains not enough new territory to fuel them.

So, why do I think we are seeing the end of the American Empire? Well, let’s look at where America is and where it is going. Currently, the United States has the largest military and the largest economy, with a GDP of 19.39 trillion and a national debt of 21.4 trillion dollars. It is estimated that by 2028 the debt could rise to $33 trillion. Trump has accelerated this with his tax cuts. Tax cuts are like heroin They give you an instant jolt of energy, which feels great at the time, but in the long term, starves you of needed revenue. When the debt does reach $33 trillion, 1 in $5 the government takes in will go into servicing the interest on that debt, and that is only if interest rates stay as low as they are. There is no reason to think that will happen, especially if the greenback stops being the world’s reserve currency. 

Right now, almost every country has American dollars on hand. Oil is primarily traded in greenbacks. That is why the U.S. dollar is considered the world’s premium reserve currency. Since the dollar is in such demand, its value remains stable. Stability is important because it allows the Fed to print more money without fearing hyperinflation. That’s what’s killing Venezuela. That’s what did in Germany in the 1930s. However, the U.S. will likely see competition in the decades to come. The Euro is becoming more popular, and because of Trump’s tariffs, more countries are looking to trade with the EU. China is another major market and it is expected to surpass the United States in size. Right now, the Chinese government makes it difficult for money to leave the country, meaning there is less in circulation and thus less in demand, but that will change. My point: America could lose its status as the world’s premium reserve currency, and then it will become harder for the Fed to keep interest rates down.

Talking about interest rates. Since 2008, the Fed has kept them at near zero through monetary easing and other accounting tricks. This was done to encourage lending after the 2007-8 Financial Collapse destroyed consumer confidence. This wasn’t a one-time deal. The Fed has been suppressing rates ever since. When the next downturn comes, and it will, the Fed will not have the means to kickstart the economy. They can’t lower interest rates any further because they have already hit rock bottom. Thus, the recovery will be slow. The federal government will take in less revenue, meaning it will be harder to service its debt, but also harder to pay for such vital services like Medicaid and Medicare.

Americans spend more on health care than all other developed nations. For example, Americans pay $8,508 per capita, whereas the Brits spend $3,405 for medical care. If money determined outcomes, the Americans should be doing better than their British counterparts. Instead, in a recent study, America ranked last out of eleven industrialized nations: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the U.K. and the U.S. The U.K., it should be noted, was number one. Also, every year, 643,000 Americans go bankrupt due to medical expenses. Medicare and Medicaid are expected to become more expensive in the coming decades. In the case of Medicare alone, they project a $3.3 trillion shortfall over the next 75 years. Yet medicine might be the least of the Americans’ worries. Infrastructure could be the iceberg that sinks the U.S. 

According to the American Society of Civil Engineers (ASCE), the United States currently gets a D+ regarding the state of infrastructure. The ASCE estimates it would cost 4.5 trillion dollars to get America up to code by 2025. Trump is promising at most $1 trillion, and I doubt he can muster even that. The tax cuts he and the Republicans passed mean there is nothing left over for infrastructure. Understand, decaying infrastructure is like a terminal disease. The longer you let the disease fester, the harder and costlier it’s going to be to fix it. If Donald Trump wants to keep his promise, he must either borrow more money, raising the debt by another 4.5 trillion, or take in more revenue. The latter won’t happen.

In 1950, when America was at the height of its power, the top marginal tax rate was 90%. This was why people could go to college under the GI Bill. This was why Eisenhower was able to build the Interstate Highway System, and why NASA could send a man to the moon. Today, it is at 34%, and the 2018 fiscal deficit is 779 billion dollars. Even if the economy grows by 3 or 4%, as the Trump administration believes it will, the budgetary deficit of 2019 is still projected to be 984 billion dollars. It should reach a trillion by 2020, two years ahead of schedule. This is partly because Trump doesn’t care about deficits. He once even bragged that he was the king of debt. To be fair, when developing apartment buildings or hotels, it’s expected that you will incur massive amounts of debt. However, America is not a hotel. Debt is sometimes necessary, but too much can be deadly.

Trump thinks you can just print more money, or that you can stop paying the interest on the debt. In fact, the latter is how Trump survived his six bankruptcies. However, again, he was running a family business. The federal government can’t do that. The stability of the dollar is tied to interest payments. Remember, the reason the greenback is so stable is that governments around the world keep American dollars in reserve. They also own U.S. Treasury Bonds. They do so because they are guaranteed to get their money back plus interest. But if the United States defaulted on its national debt, then they would lose all faith in the system. To curb inflation, – and inflation would be happening and in a bad way because countries around the globe would be dumping the American dollar – the Fed would have to raise interest rates. That would bring economic growth to a standstill. America would befall a deep depression, unemployment would skyrocket, and what would this mean for America’s military?

Ultimately, what causes empires to collapse is unrestrained expansion. As I said before, soft collapses are driven solely by over-expansion.  By its very nature, empires need to grow. America is no different. During the Iraq War, the U.S. built twelve military bases in the country. This significantly expanded its reach into that part of the world. Through these bases, it controls the flow of Iraqi oil and ensures its safety, something it could not have done while Saddam Hussein was in power. This doesn’t mean America owns the oil. It doesn’t have to. The reason the U.S. invaded Iraq was to increase the supply of the black goo. According to basic economics, if there is more of something in the market, then the price will fall. By merely opening Iraq’s oil fields to the world, that should have caused the price to drop. It didn’t, but that’s because of another factor: investors hate uncertainty. Nothing produces uncertainty more than a civil war triggered by the fall of Saddam Hussein, who we now know was keeping the crazies in check.

There is a price tag for these kinds of military adventures. In the case of Iraq, as of 2017, it stands at 2.4 trillion dollars or more than half of the funds needed to repair America’s crumbling infrastructure. It should be noted that this war was paid through borrowed money, meaning that the U.S. will have to pay it back with interest. It also means its part of the $20 trillion debt that hangs over every American’s head. This price tag will only grow as more troops are deployed to Iraq, and more will. Many will come home maimed  and traumatized. Some will suffer from PSTD. Others will be so severely damaged that they will not be able to work. Money will have to be expended to support their rehabilitation. And of course, so far, we have only been talking about Iraq. It is far from being the only war America is fighting.

Since 2001, the United States has been engaged in ongoing conflicts throughout the Middle East and beyond. The only war that has gone on longer is the Vietnam War, which went for 19 years and 180 days, though that will change in 2021, and experts expect the U.S. to be in Afghanistan and Iraq for decades to come. The U.S. is also involved in the war in Syria and is supporting the Saudis war in Yemen. Since Trump tore up the Iranian Nuclear Treaty, I suspect that the U.S. is heading to war with it. Since Iran is four times bigger than Iraq and unlike Hussein, has a real military, a conflict with Iran would cost far more. We could be looking at trillions of dollars and tens of thousands of deaths. My point: The United States is quickly heading for a hard collapse scenario.