Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Bill Bonner: US Empire Is ‘Old and Decaying’

Bill Bonner believes America is in irreversible decline. We think he’s probably right. The following extract from The Daily Reckoning sums up the scale of the challenges facing the US.

After the Berlin Wall came down… America had no enemies worthy of the name. She had a monopoly franchise on the world’s money - the dollar was the undisputed queen of the planet’s reserves. And she had a monopoly on military power too - the undisputed king of the hill, with a Pentagon budget nearly as large as all other nations’ military spending put together.

But nature abhors a vacuum and detests a monopoly. Lacking a suitable challenger, America had to become her own worst enemy. Lacking a rival who could destroy her, she had to destroy herself.

And so, when Americans went to the polls in November of 2000, they elected a president who was up to the job: George W. Bush. Eight years later, the Clinton surpluses had turned into the biggest deficits ever…an immense bubble had impoverished the middle class…and the country was engaged in two unwinnable, unnecessary, and hugely expensive wars.

Mission accomplished!

But it’s not over. The millstones of history may grind slowly…but they grind exceedingly fine… The American empire is clearly overstretched and over-indebted. If it is to save itself, it should scale back immediately…cut... the Pentagon budget in half, for example, and eliminating all unnecessary expenses (which is most of them). Instead of spending $3 trillion, it should spend…say&helli... trillion, and run a surplus.

What about the depression, you might be wondering. Isn’t this the time to increase government spending, rather than decrease it? Ah…if you are even asking the question, you are the victim of a dead economist. Keynes’ theory was that the state should run contra-cyclical surpluses and deficits - to offset the ups and downs of the business cycle. But that is too soggy a bog for us to trod in today. Instead, we will skirt it with another of our dicta:

People come to believe what they must believe when they must believe it.

When an empire is new and fresh and growing…people believe in saving, hard work, and small frugality.

When an empire is old and decaying…they think the government should spend “whatever it takes” to take care of them. This attitude helps destroy the empire…thus making room for the next one…