Part of what killed the ancient Roman Empire was overspending & the resulting rampant inflation: Tainter, Joseph A. The Collapse of Complex Societies. Cambridge University Press, 1988. [Do a Google search for some Tainter lectures.] "In Egypt, from which the best documentation has survived, a measure of wheat that in the first century A.D. sold for ***six*** drachmae, had increased to 200 drachmae in 276 A.D., 9000 in 314, 78,000 in 324, and to more than ***2,000,000*** drachmae in 334 A.D." p. 143. "By the latter part of the third century the ***currency was so worthless that the State resorted to forced labor and an economy in kind***. The earliest example of the former may be Aurelian's conscription of craft associations to build the walls around Rome. By the time of Diocletian the State was so unable to rely on money to meet its needs that it collected its taxes in the form of supplies directly usable by the military and other branches of government, or in bullion to avoid having to accept its own worthless coins." p. 139. "But much of the rebuilding (and the building of Constantinople) was done by stealing accumulated treasures from other places. Despite this, the building of Constantinople was a major drain, as was the support of its 80,000 citizens placed on the dole. Meanwhile, the city of Rome was a continuing burden: in the fourth century it had some 300,000 inhabitants receiving public distributions." p. 142 [The population of city of Rome at this time was perhaps 1 million.] "In the third century taxation had become so heavy as to consume the capital resources of taxpayers. In the fourth and fifth centuries it became even worse. As the sizes of both the military and the civil administrations doubled, taxes had to be raised from a weakened Empire to foot the bill. ... The Empire was by this time sustaining itself by the consumption of its capital resources: producing lands and peasant population. Continued investment in empire was creating not only a drop in marginal output, but also a drop in _actual_ output. ... Collapse was in the end inevitable, as indeed it had always been." p. 150. *** [The early Roman Empire was basically a Mediterranean-sized Ponzi scheme, which collapsed when they ran out of new "investors":] "From the middle of the third century B.C. ever increasing quantities of gold and silver flowed into the Roman treasury. The result was that the Roman people paid little or nothing for continuing conquests and for garrison costs. The captive populations underwrote the cost of further expansion. At this point in their history the Roman people were investing in a policy of territorial expansion (with associated rise in administrative costs), and reaped the return on their investment." p. 148. "Inevitably, though, this high rate of return could not be maintained. Three factors combine ultimately to lower the marginal return for any such policy. First, the number of profitable conquests declines. A geographically expanding state ultimately encounters a competitor with equivalent capabilities, whose conquest would be too expensive, if not impossible. ... Secondly, the logistics of transport and communication dictate that, beyond a certain distance from the capital, the lands will be difficult to govern. For the Roman Empire this was especially the case the farther one traveled inland from the Mediterranean sea lanes. ... Thirdly, once the accumulated surpluses of conquered nations have been appropriated, a conqueror must thereafter incur costs to administer, garrison, and defend the province. And when the accumulated surpluses have been spent, this must be paid for out of yearly income. Costs rise and benefits decline." p. 148-149. At 03:28 PM 7/16/2011, Simon Plouffe wrote:
The total being something like 62000 billion dollars, the interest of this is about 3000 billions dollars per year (at 5%).
The curve of US debt (as well as most of the others) is steadily increasing, if we extrapolate the curve for let's say 250 years :
First scenario, the international banking system will collapse and 3 countries might get pass this point , China, India and Russia, mostly because the amount of money the owe is ridiculous.