Tag Archives: public debt

America on the Brink?

In the current issue of Foreign Affairs, Niall Ferguson’s “Complexity and Collapse: Empires on the Edge of Chaos” argues that societies end suddenly, not through a protracted “decline and fall”.

While most historical postmortems seek direct causal links between calamity and loosely related events decades removed, Ferguson says societies are more complex systems—adaptive and chaotic—susceptible to shock through the unintended consequences of seemingly trivial actions.

His example:

Over the last three years, the complex system of the global economy flipped from boom to bust —all because a bunch of Americans started to default on their subprime mortgages, thereby blowing huge holes in the business models of thousands of highly leveraged financial institutions.

Ferguson argues that previous societal collapses can be similarly linked to contemporaneous fiscal disruption—and asks whether the United States might be the next society to push itself over the brink. Continue reading America on the Brink?