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Taking Stock

Mid-year, give or take a week, is a good time to make some high-level assessments.

(Zoran Zeremski/Shutterstock)

Gibbon opens The Decline and Fall of the Roman Empire with a survey of that great state in the time of the Antonines: the disposition of armies and fleets, the power of the state cult, the condition of the provinces, the health of the treasury. “It is the design of this, and of the two succeeding chapters, to describe the prosperous condition of their empire,” he writes in the first chapter, “and afterwards, from the death of Marcus Antoninus, to deduce the most important circumstances of its decline and fall; a revolution which will ever be remembered, and is still felt by the nations of the earth.”

Taking a page out of Gibbon is rarely a bad move; the middle of the year is a good time for reckoning up debits and credits. Let us hope the object of our accounting does not soon meet the same fate as his.


The weaknesses of our current situation almost all take the form of attacks on American state capacity and political sovereignty. As that canny old philosopher Humpty Dumpty said, “The question is, which is to be master—that is all.” Do we live in a democratic republic where the people rule through their representatives in the state, or do we live in an administrative dictatorship? As bureaucratic and corporate elements gain power and autonomy, it is at the expense of the politically responsive republican government.

Our fiscal conditions are perhaps the foremost cause for concern. The New York Times editorial board has suddenly decided to be worried about the national debt. In a July 2 leader titled “America Is Living on Borrowed Money,” the sages of the City suddenly rediscover common sense: Floating bonds to pay for ongoing programs rather than particular projects is risky and, if interest rates climb, very expensive. Increasing spending and cutting revenue can be paid for only with debt or money-printing.  

Somewhat perversely, the board lays most of the blame at the feet of the Republicans’ tax cuts and argues that abolishing the debt ceiling outright is a necessary reform. Increasing Treasury’s discretionary borrowing power is hardly a solution to the borrowing problem; indeed, this year’s showdown conceded far too much. This debt ceiling deal is different in nature, not just degree. Rather than setting an amount beyond which the Treasury may not borrow, it gives a date at which the Treasury’s permission to borrow must be renewed. In theory (give or take some particulars), Janet Yellen could hock the whole country tomorrow without further input from the political organs of the state. 

The legislature has proven just as happy over the past hundred years to allow its control over the spending process to be eroded by the executive. Congress giving Treasury the credit card is an ideal circular buck-passing scheme, putting off growing revenue or cutting expenditure indefinitely—a borrowing bonanza underwritten by the dollar’s status as a world reserve currency, the American nuclear stockpile, and the increasingly tenuous historical argument that we’ve always paid back our debts before.

It just so happens, as the New York Times has muddled out, that this is a dangerous high-wire act. The whole thing falls apart if the dollar begins to act like a normal floating currency—as it is clear large portions of the world would prefer—or if interest rates start to make debt maintenance unsustainable.


Among other distortions caused by the artificially strong dollar is our trade deficit. Last week I reviewed Robert Lighthizer’s recent book on American trade policy; I encourage anyone with an interest in the topic to read at least his explanation of the problems caused by a massive and consistent trade deficit. The net outflow of American dollars has been enabled by the sale of American assets to non-American entities. That is why we all woke up one day to find that a Chinese interest owned the country’s largest pork producer.

The hollowing out of the American industrial base through dogmatic free trade and political mismanagement lays before us some dire prospects. Thanks to a period of ill-advised consolidation and state fecklessness, the American defense industry is struggling to keep up with the material aid we are providing in the Russia–Ukraine war; if footmen tire you, what will horses do? Or what if there were war with, say, one of our main pharmaceutical precursor suppliers or a nation that controls the majority of the rare earth metals supply chain

Regular readers of The American Conservative will hardly need to be reminded of our feckless foreign policy’s incompatibility with republican government. The last time Congress declared war was 1942. The military–industrial complex, a lazy Congress, and a population increasingly insulated from the horrors of war—these have all led to the most ancient duty of the democratic state, deliberating war and peace, becoming an affair for unaccountable camarillas.

These conditions combine to keep our national destiny out of the hands of the democratically accountable elements of the state and in the hands of a relatively small group of administrative and corporate cabals—that is to say, to erode the sovereignty and the power of the nation as they impede the expression and execution of the will of the people. 

Yet not all is lost. Some fundamental points of strength remain.

The United States is a very large country—330 million people is a lot of people, and 3.8 million square miles is a lot of land. Nearly every natural resource we could want can be found in the continental U.S. Even if Americans hit the bog-standard measures of productivity, the U.S. would be among the wealthiest and most powerful countries on earth on pure magnitude of manpower and resources. Even better: To our north and south sit two neighbors that are weak, dependent on us economically, and territorially unambitious; on our other two sides, ocean. (As a congressman, Lincoln underlined these advantages and the attendant responsibilities: “At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide.”)

A related point of strength is our agricultural sector. American farming is the world-beater; it continues to improve. American farmers are so good at producing food that our internal economic stability and the world market have to be propped up with a Rube Goldberg machine of subsidies and protections to prevent American corn from crashing food prices. As in any technical field, there are always ways to improve particulars and the entire system—but when was the last time you were worried about an honest-to-God famine in this country?

Nor is all lost when it comes to industry. The U.S. remains the second largest manufacturing power in the world, trailing only China. (It is third if you indulge the fiction that the E.U. is a single economic unit.) Our technology sector remains basically unrivaled—one of the downstream benefits of a very large population is a very large pool of talented and innovative people.

Victory is never assured. Yet defeat is not guaranteed, either. American politicians must ask what must be done to rebuild sovereignty and republicanism. Some congressmen have made noises about reining in presidential war powers, and the tide has turned decisively against extreme free trade dogmatism; perhaps these changes could be followed with proposals to reform the civil service and to force Congress to vote every time the federal government floats debt. As Alasdair Grey once wrote, Imagine you live in the early days of a better nation.


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