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

Posted by thisislife2 5 hours ago

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Comments

Comment by indigoabstract 35 minutes 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.

Comment by mikelitoris 3 hours 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.

Comment by libraryofbabel 2 hours 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.

Comment by melesian 2 hours 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.

Comment by drumhead 3 hours 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.

Comment by jfengel 2 hours 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.

Comment by hshdhdhj4444 1 hour 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.

Comment by Jensson 2 hours 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.

Comment by SanjayMehta 1 hour 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

Comment by returnInfinity 2 hours ago

look at gold price

Comment by m0llusk 2 hours 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.

Comment by indubioprorubik 3 hours 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.

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Comment by earlyedition 1 hour ago

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