The great credit card max-out

The first 20 pages of Empire of Debt is enough to convince me buying it was a great use of my money. Um, errr ... well, since I put it on one of my credit cards, it was an ironic use of my ... well, since 'money" is really a funny term nowadays, it was, um, let's just say I'm glad I made the exchange for this book.

Bill Bonner and Addison Wiggin have written a book that ... well, since I've only read 20 pages, I guess I should make no declarations about the book. The introduction, "Slouching Toward Empire," sets the stage for what I expect from others' recommendations to be an entertaining but sobering book about, as the subtitle notes, "The Rise of an Epic Financial Crisis."

Having experienced on a personal scale what the writers are saying about the "macro" economy, I have been waiting for the other shoe to drop. If a person, or a state, spends every bit of credit available, and keeps borrowing more to finance more spending, at some point the creditors step in and say, "Um, can we make some arrangements for you to pay this back at some point? That's all the credit I can give you." The next few years after that give you an appreciation for the taste of macaroni and cheese mix made with no milk and the cheapest margarine on the shelf.

Bonner and Wiggin, who toss in some plugs for the Web site Daily Reckoning.com, argue that the United States is showing all of the symptoms of being an empire on the verge of decline - the profound belief that "we" have evolved into the best system of government ever known and have a moral obligation to spread that system forcefully around the world, using the military "to make the world safe" for that system. While past empires have funded these adventures by exacting tribute from conquered lands, the American Empire simply runs up its credit cards.

Some of the stuff in the first 20 pages articulates things that I have been trying to put into words forever, beginning with these thoughts about the inevitability of disaster by living beyond "our" means. Other stuff gives me new insights that make me a tad nervous, such as the suggestion that the price we receive for our labor historically was about the same around the world, got out of whack during the Industrial Revolution, but likely will even out as years go by - and not likely only by raising the rest of the world's wages. "The process could take several generations. It could stall. There could be countertrends. But there is no reason to think a man's labor is inherently worth more in France than in Bangladesh, or that a plumber with stars and stripes on his overalls should earn more than one with a crescent moon."

I'm the "Refuse to be afraid" guy, so I'm not saying this stuff to scare you or myself into a catatonic state, nor I suspect are Bonner and Wiggin. Knowledge being power, I expect the information will be useful in preparing as best we can for the inevitable macaroni-and-cheese days, which they note will come when everyone least expects them - it could be in a couple of weeks or in the next generation. The signs, however, point to getting prepared now. The summer days of the empire have been spent away - we're somewhere between September and the first day of winter.