The Soviet Union fell because it was over-extended, financially. The USSR was supporting, in addition to itself, countries in Asia, Eastern Europe, Africa, Cuba, South America and so on. Given the obvious inevitably of world-wide communism, the Soviets saw no problem with fomenting Communist revolutions all over the world. That takes a lot of money.
Ronald Reagan, meanwhile, made it clear to the Soviets that the U.S.A. would win the arms race. The Soviets, trying to keep up in the arms race plus support Communist insurgents everywhere, simply could not afford all that overhead.
As it turns out, Communist dictatorships are better at divvying up loot than they are at generating wealth. I guess that’s true of socialists, generally. If they understood economics, they wouldn’t be socialists in the first place.
In any event, the Soviet Union collapsed because it could not afford to continue paying for all its pet projects.
This will be America’s undoing as well. The U.S. simply cannot afford all that we have committed to do and it will bankrupt us. No, we’re not fomenting democratic revolutions all over the world, though we do have 800 military bases on more than 140 countries world-wide. (Yes, we have blown a bundle on the Iraqi fiasco.) But we are over-extended at home.
The current national debt, as I write this, in roughly $9,577,373,138,799.00. The rate at which we are accumulating debt is increasing. The National Debt took over six years to rise from $5 trillion to $6 trillion. It then took less than 2 years to reach 7 trillion and another twenty months to reach 8 trillion on October 18th 2005. Now we’ve added another $1.58 trillion since then.
It should be obvious that the interest payment on a debt of 9.5 trillion dollars is a significant portion of the federal budget. In 2007, interest on the national debt was 430 Billion dollars. It wasn’t all that long ago that the entire federal budget was less than that.
But the government keeps coming up with more and more programs, providing more and more services, costing more and more of your money. When the federal budget is in deficit, which is most of the time, the debt continues to climb.
It is not, of course, just the national debt which is of concern. Due to massive “entitlement” programs, government pensions and all manner of spending for which the U.S. is already obligated, there are more trillions of dollars which we call ill afford to spend. As P. J. O’Rourke once quipped, “If you think health care is expensive now, wait ’til you see what it costs when it’s free.”
The bottom line is that America’s bottom line is very much in the red, and that will be our undoing.