Historian warns of
sudden collapse of American ‘empire’
Gardner-Smith, Aspen Daily News Staff Writer
Tuesday, July 6, 2010
Harvard professor and prolific author Niall Ferguson
opened the 2010 Aspen Ideas Festival Monday with a stark
warning about the increasing prospect of the American
“empire” suddenly collapsing due to the country’s rising
“I think this is a problem that is going to go live
really soon,” Ferguson said. “In that sense, I mean
within the next two years. Because the whole thing,
fiscally and other ways, is very near the edge of chaos.
And we’ve seen already in Greece what happens when the
bond market loses faith in your fiscal policy.”
Ferguson said empires — such as the former Soviet
Union and the Roman empire — can collapse quite quickly
and the tipping point is often when the cost of
servicing an empire’s debt is larger than the cost of
its defense budget.
“That has not been the case I think at any point in
U.S. history,” Ferguson said. “It will be the case in
the next five years.”
Ferguson was conscious of opening the Ideas Festival
on such a stark note.
“Walter Isaacson, the leader of this great
institution said, ‘Don’t be too dark!,’” Ferguson said.
The affable British scholar tried to keep it light.
He used a stage whisper to tell the Aspen Institute
audience, “I know you’re not comfortable with the word
‘empire,’ especially just after the Fourth of July, but
you are the Redcoats now.”
He said the U.S. is now deeply in the red as a
country because of a combination of the Great Recession,
the resulting federal stimulus and financial bailout
programs, two wars, the Bush tax cuts, and a growth in
social entitlement programs.
And economic debt can lead to a sudden loss of
military power and global respect, Ferguson said.
“By combating our crisis of private debt with an
extraordinary expansion of public debt, we inevitably
are going to reduce the resources available for national
security in the years ahead,” Ferguson said. “Because as
a debt grows, so the interest payments you have to make
on it grow, even if interest rates stay low. And on
current projections, the federal debt is going to be
absorbing around 20 percent — a fifth of all the taxes
you pay — within just a few years.
“The item of discretionary federal expenditure most
likely to be squeezed is of course defense. And there
are lots of historic precedents for that,” said
Ferguson, who is the author of “Empire: The Rise and
Demise of the British World Order and the Lessons for
Ferguson said the financial crisis that started in
2007 has “has accelerated a fundamental shift in the
balance of power,” with the U.S. shedding power and
China absorbing it.
“I’ve just come back from China — a two-week trip
there — and the thing I heard most often was, ‘You can’t
lecture us about the superiority of your system anymore.
We don’t need to learn anything from you about financial
institutions and forget about democracy. We see where it
has got you.’”
David Gergen of CNN, who moderated the discussion,
which also included billionaire Mortimer Zuckerman,
asked Ferguson whether it made a difference if the U.S.
declined as a world power.
“Having grown up in a declining empire, I do not
recommend it,” Ferguson said. “It’s not a lot of fun,
actually, decline. To be more serious, a world in which
the United States is no longer predominate is not likely
to be a better world, actually.”
In what he called his “light moment,” Ferguson said,
“I think there is a way out for the United States. I
don’t think its over. But it all hinges on whether you
can re-energize the real mainsprings of American power.
And those two things are technological innovation and
“Those are the things that made the United States the
greatest economy in the world and the critical question
is, ‘Are we going to get it right?’ Can we revive those
things in such a way that in the end we grow our way out
of this hole the way the United States grew its way out
of the 1970s and of course out of the 1930s?”
The Aspen Ideas Festival continues through July 11 at
the Aspen Institute. Such notables as U.S. Attorney
General Eric Holder, Microsoft billionaire Bill Gates,
U.S. Senator Dianne Feinstein, and former Federal
Reserve chairman Alan Greenspan are scheduled to appear.
A number of events are open to the public, but
tickets were going fast on Monday through the website
Aspen Show Tickets. Aspen Public Radio also plans on
broadcasting a number of festival events live, including
on Tuesday at 10:30 a.m. and at 1 and 5 p.m.
Want to look anything up?
for more pictures, stories, etc.