B.W.'s Book Report: Empire of Debt

I really don't know why people try to make economics so complicated. From years of personal experience, I can tell you if you always spend more money than you take in, and if you depend on various lines of credit to keep you going, at some point the cash will run out, the credit will run out, and the people to whom you owe money will dictate the terms of your surrender.

A couple of basic facts drive Bill Bonner and Addison Wiggin's amazingly sensible book, Empire of Debt: The Rise of an Epic Financial Crisis. First, the United States of America stopped being a republic around the Wilson administration and has been an empire for most of the time since then. Second, instead of funding the empire through the tributes of conquered lands, like traditional empires do, this empire has funded its misadventures by borrowing money and printing federal reserve notes up the wazoo.

It works for empires the same as it works for individuals: If you always spend more than you take in, and if you depend on various lines of credit to keep you going, at some point the cash will run out, and the people to whom you owe money will dictate the terms of your surrender. The American empire is going to collapse under the weight of its debt sooner or later, and Bonner and Wiggin make a compelling case that sooner is more likely than later.

It's a wonderful history lesson, explaining how Woodrow Wilson launched the empire and subsequent emperors, errr, presidents have expanded it. The experience of reading the book was one of curtains being opened that explain so much of the silliness that drives the empire, and why we have never in our lifetimes lived in the republic envisioned by the founders of the United States of America.

A reader could get very depressed reading this book, as it tends to confirm your worst fears about why America isn't the America we were taught to believe it is. But much as there's actually a sense of relief and empowerment at realizing you're going to die someday and time's a-wasting, I actually felt a bit of comfort at understanding Constitutional America was gone before I was born. At least now I know there was nothing I or anyone alive could have done to prevent the establishment of the empire.

Our role, then, is to keep the flame of real freedom alive, to tell the stories of what it must have been like to build a house without getting permission from a bureaucrat at the county seat, to earn a living without opening your books to the federal government and paying a tribute to Washington and the state capital in order to keep going, to have some control over your life.

I'm off on a tangent.

Empire of Debt should be required reading for just about anyone. There's a quote to that effect on the dust jacket, and I agree. Much of this is probably old hat to longtime anarcho-libertarians, but for relative newbies like me, this book is an excellent primer in real economics, as opposed to the voodoo economics that have ruled the roost in recent years.

And oddly enough, parts of it are downright hilarious, too.