4 ms·

How Debt Bankrupted the British Empire, and Why America Is Walking the Same Path

38 points by thisislife2 9mo ago

indubioprorubik 9mo ago
Eh, no, the debt is not a problem, as long as the world is willing to pay the tax for the police and ordering institutions. The ruling empire is a defacto service provider- and the world taking and hoarding the dollar is basically allowing for the printing of endless debt, as long as the empire does its job. If it ceases to perform its job, the tax paid by buying and keeping currency reserves becomes worthless - and the debt realizes. Thus can be concluded, the moment a empire acts only in self interest, abandoning all its services to the global public, the debt it holds becomes real.
- deleted 9mo ago
  [deleted]
drumhead 9mo ago
The US will be able to keep issuing as much debt as they like as long as the Dollar is the global reserve currency. Its when that stops being the case they'll be in trouble with hyperinflation being the most likely outcome.
- Jensson 9mo ago
  British pounds were the global reserve currency, then when they took too much debt it stopped and it was very bad for them. People will stop using your currency as a reserve currency if you abuse it too much.
- jfengel 9mo ago
  The US will keep issuing debt as long as people are willing to buy its debt at a reasonably low price. Which people keep doing. For a long time that was because people were justifiably convinced that the US would honor those debts, which it could do because it kept producing even more stuff every year, and would never even think about threatening to default. Here in 2026 I cannot imagine why they are continuing to, except inertia.
  - hshdhdhj4444 9mo ago
    > in 2026 I cannot imagine why they are continuing to, except inertia. Because there is no where else for that debt to go. No one else wants to take on so much debt. Meanwhile there are a bunch of asset managers who are paying the mortgage on their beach home in the Caribbean with the bonuses they earn by investing in US debt. If the US defaults on that debt 10 tears from now that means they still earned 9 years of million dollar salaries, and anyways they won’t be blamed for something the entire industry suffered from at that point. If they do the prudent thing and ask for a higher price they will end up investing fewer dollars which reduces their 2% commission on invested capital, money that might go to their international equity golfing buddy instead. Entities where the money is managed by the investor itself (for example, foreign national governments) do indeed appear to be cutting back.
  - drumhead 9mo ago
    Because everyone has a lot of dollars and they need to earn a return, so its either the Eurodollar market or US debt. US debt is safer. But its true to say that people are more and more reluctant to buy longer dated bonds and are turning to shorter and shorter maturities which is another problem for the US government.
- returnInfinity 9mo ago
  look at gold price
- SanjayMehta 9mo ago
  Don't know about other countries but India has reduced exposure its peak by 26% down to USD 174B in the last few months. https://thecradle.co/articles-id/35568 https://thecradle.co/articles-id/35568
- thisislife2 9mo ago
  And that's the interesting question - how long will the dollar remain the global reserve currency? Apparently the recent spike in Gold prices is partly because of de-dollarisation: - Gold and De-Dollarisation: Is the US Dollar Losing Its Safe-Haven Status? - https://www.royalmint.com/invest/discover/market-news/gold-and-de-dollarisation-is-the-us-dollar-losing-its-safe-haven-status/ https://www.royalmint.com/invest/discover/market-news/gold-a... - Is the gold boom a sign of de-dollarisation? - https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-dollarisation/?set_edition=us https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-do...
mikelitoris 9mo ago
“The British Empire’s descent from unchallenged global hegemon in 1939[…]” lol what? British empire was a meager shadow of itself after WW1. Indians’ take on British empire is always wild.
- libraryofbabel 9mo ago
  In fact it peaked in size in 1920. But you’re broadly correct about the sense of decline post-WWI and the sense that America would be the dominant 20th-century power.
  - melesian 9mo ago
    The UK itself lost one third of its land area in 1921, following yet another insurrection in Ireland (always a coerced part of the UK subject to genocidal rule and expropriation). The last straw for the Irish was summary executions of the insurrectionists and the ravages of the Black and Tans -- like ICE but with arsonists and criminals, but without masks. The US will be fortunate if the parallels remain only financial.
m0llusk 9mo ago
The American economy today is far larger and more diverse than Rome or the British Empire ever were which makes such comparisons difficult at best. One of the good things about fiat currencies is that you can manipulate or replace them as needed.
earlyedition 9mo ago
[dead]
indigoabstract 9mo ago
The article goes over my head by building too many arguments to sustain its case. For me it's much simpler to articulate: Human relationships are build on trust and mutual respect. Once that is gone, the relationship goes out the window as well and it's not coming back. Counter intuitively, relationships between countries seem to function mostly the same way, instead of being based strictly on interest and practicality as one might expect. Once trust is strained until it breaks, it's not going to be the same from then on.
sjajshha 9mo ago
I found John Glubb’s analysis of the problem much better than the author’s: https://people.uncw.edu/kozloffm/glubb.pdf https://people.uncw.edu/kozloffm/glubb.pdf Much more impressive he wrote this 50 years ago, but he might as well have been alive today. History certainly rhymes.
- mrlonglong 9mo ago
  A glaring omission is the Chinese civilisation. It's lasted thousands of years.
  - prewett 9mo ago
    The individual dynasties, however, lasted about 250 years each, like the others listed. China also got taken over by the Mongols in the mid-1200s, (retaken by Han Chinese a century later), and then by the Manchurians in the mid-1600s. Chinese civilization, not just the government, got taken over by European rationalism/modernism in 1940s with the Communist Revolution. (It's ironic that the Chinese government talks complains about "Western influences", when their whole governmental ideology is based on European ideas.)
    - mrlonglong 9mo ago
      Confucianism lasted a lot longer though.
kledru 9mo ago
Second Rome = Constantinople. but interesting to see this flagged...

38 points by thisislife2 9mo ago

Eh, no, the debt is not a problem, as long as the world is willing to pay the tax for the police and ordering institutions. The ruling empire is a defacto service provider- and the world taking and hoarding the dollar is basically allowing for the printing of endless debt, as long as the empire does its job. If it ceases to perform its job, the tax paid by buying and keeping currency reserves becomes worthless - and the debt realizes. Thus can be concluded, the moment a empire acts only in self interest, abandoning all its services to the global public, the debt it holds becomes real.

deleted 9mo ago
[deleted]

drumhead 9mo ago

The US will be able to keep issuing as much debt as they like as long as the Dollar is the global reserve currency. Its when that stops being the case they'll be in trouble with hyperinflation being the most likely outcome.

Jensson 9mo ago
British pounds were the global reserve currency, then when they took too much debt it stopped and it was very bad for them. People will stop using your currency as a reserve currency if you abuse it too much.
jfengel 9mo ago
The US will keep issuing debt as long as people are willing to buy its debt at a reasonably low price. Which people keep doing. For a long time that was because people were justifiably convinced that the US would honor those debts, which it could do because it kept producing even more stuff every year, and would never even think about threatening to default. Here in 2026 I cannot imagine why they are continuing to, except inertia.
- hshdhdhj4444 9mo ago
  > in 2026 I cannot imagine why they are continuing to, except inertia. Because there is no where else for that debt to go. No one else wants to take on so much debt. Meanwhile there are a bunch of asset managers who are paying the mortgage on their beach home in the Caribbean with the bonuses they earn by investing in US debt. If the US defaults on that debt 10 tears from now that means they still earned 9 years of million dollar salaries, and anyways they won’t be blamed for something the entire industry suffered from at that point. If they do the prudent thing and ask for a higher price they will end up investing fewer dollars which reduces their 2% commission on invested capital, money that might go to their international equity golfing buddy instead. Entities where the money is managed by the investor itself (for example, foreign national governments) do indeed appear to be cutting back.
- drumhead 9mo ago
  Because everyone has a lot of dollars and they need to earn a return, so its either the Eurodollar market or US debt. US debt is safer. But its true to say that people are more and more reluctant to buy longer dated bonds and are turning to shorter and shorter maturities which is another problem for the US government.
returnInfinity 9mo ago
look at gold price
SanjayMehta 9mo ago
Don't know about other countries but India has reduced exposure its peak by 26% down to USD 174B in the last few months. https://thecradle.co/articles-id/35568 https://thecradle.co/articles-id/35568
thisislife2 9mo ago
And that's the interesting question - how long will the dollar remain the global reserve currency? Apparently the recent spike in Gold prices is partly because of de-dollarisation: - Gold and De-Dollarisation: Is the US Dollar Losing Its Safe-Haven Status? - https://www.royalmint.com/invest/discover/market-news/gold-and-de-dollarisation-is-the-us-dollar-losing-its-safe-haven-status/ https://www.royalmint.com/invest/discover/market-news/gold-a... - Is the gold boom a sign of de-dollarisation? - https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-dollarisation/?set_edition=us https://unherd.com/newsroom/is-the-gold-boom-a-sign-of-de-do...

mikelitoris 9mo ago

“The British Empire’s descent from unchallenged global hegemon in 1939[…]” lol what? British empire was a meager shadow of itself after WW1. Indians’ take on British empire is always wild.

libraryofbabel 9mo ago
In fact it peaked in size in 1920. But you’re broadly correct about the sense of decline post-WWI and the sense that America would be the dominant 20th-century power.
- melesian 9mo ago
  The UK itself lost one third of its land area in 1921, following yet another insurrection in Ireland (always a coerced part of the UK subject to genocidal rule and expropriation). The last straw for the Irish was summary executions of the insurrectionists and the ravages of the Black and Tans -- like ICE but with arsonists and criminals, but without masks. The US will be fortunate if the parallels remain only financial.

m0llusk 9mo ago

The American economy today is far larger and more diverse than Rome or the British Empire ever were which makes such comparisons difficult at best. One of the good things about fiat currencies is that you can manipulate or replace them as needed.

earlyedition 9mo ago

[dead]

indigoabstract 9mo ago

The article goes over my head by building too many arguments to sustain its case. For me it's much simpler to articulate: Human relationships are build on trust and mutual respect. Once that is gone, the relationship goes out the window as well and it's not coming back. Counter intuitively, relationships between countries seem to function mostly the same way, instead of being based strictly on interest and practicality as one might expect. Once trust is strained until it breaks, it's not going to be the same from then on.

sjajshha 9mo ago

I found John Glubb’s analysis of the problem much better than the author’s: https://people.uncw.edu/kozloffm/glubb.pdf https://people.uncw.edu/kozloffm/glubb.pdf Much more impressive he wrote this 50 years ago, but he might as well have been alive today. History certainly rhymes.

mrlonglong 9mo ago
A glaring omission is the Chinese civilisation. It's lasted thousands of years.
- prewett 9mo ago
  The individual dynasties, however, lasted about 250 years each, like the others listed. China also got taken over by the Mongols in the mid-1200s, (retaken by Han Chinese a century later), and then by the Manchurians in the mid-1600s. Chinese civilization, not just the government, got taken over by European rationalism/modernism in 1940s with the Communist Revolution. (It's ironic that the Chinese government talks complains about "Western influences", when their whole governmental ideology is based on European ideas.)
  - mrlonglong 9mo ago
    Confucianism lasted a lot longer though.

kledru 9mo ago

Second Rome = Constantinople. but interesting to see this flagged...