Historian warns America could face destruction due to controversial policies backed by both Biden and Trump

America’s status as the world’s greatest power will end for the same reason its predecessors did — crushed by a mountain of debt that politicians see fit to ignore, historians have warned.

The United States’ century at the top could be coming to an end faster than expected, with countries in Asia increasingly pulling the plug.

Interest payments on the debt overtook defense spending earlier this month, but it won’t be force of arms that will bring the country down, according to historian Professor Niall Ferguson.

“Any great power that spends more on debt service than on defense is not going to stay great for very long,” he said in an op-ed for Bloomberg, explaining a theory he calls Ferguson’s Law.

“The truth about Habsburg Spain, the truth about ancien régime France, the truth about the Ottoman Empire, the truth about the British Empire. This law will be put to the test in the US at the beginning of this year.”

The Congressional Budget Office (CBO) this week estimated that an additional $1.9 trillion will be added to the national debt this year alone, bringing it to an eye-popping $36 trillion.

This is equal to the total value of goods and services produced in the US during the year.

Rising health care costs and the bank rate rising to a 23-year high are among the factors likely to push it up to $56 trillion over the next decade, to a record 122 percent of GDP, according to the CBO.

And there appears to be little variance between the two presidential candidates on that point, with both Joe Biden and Donald Trump adding $7 billion to the number during their terms, according to the WSJ.

JH Cullum Clark of the Economic Growth Initiative at the Bush Institute-Southern Methodist University has studied the history of previous superpowers and sees troubling parallels with America’s current situation.

He says the pattern was already established in the Roman Empire, when excessive spending tempted third-century emperors to debase the currency, triggering endemic inflation that eventually destroyed its ability to defend itself.

The wealth flowing in from the New World blinded Spain to relying on foreign loans to maintain its empire abroad, ending its dominance in the 17th century.

After all, it “managed to go bankrupt seven times in the 19th century alone, after going bankrupt six times in the previous three centuries,” wrote economists Carmen Reinhart and Kenneth Rogoff in their book This Time Is Different: Eight Centuries of Financial Folly.

100 years later, it was France’s turn after a series of accidental defaults, before Britain lost its place to the US in the 20th century, with debt skyrocketing during and immediately after World War II.

The British pound was the international reserve currency between the wars, allowing it to finance its far-flung empire, but it decisively lost that status to the US dollar after the war.

America’s debt-to-GDP ratio fell during the prosperous 1990s, reaching a low of 32 percent in 2001.

But it has since soared to 99 percent, driven up by the Great Recession of 2010 and the impact of the Covid-19 pandemic.

“The largest contributor to the cumulative increase was the inclusion of recently enacted legislation that added $1.6 trillion to projected deficits,” CBO wrote in its report.

“This legislation included emergency supplemental appropriations that provided $95 billion in aid to Ukraine, Israel and countries in the Indo-Pacific region.”

The world’s need to buy dollars used for international trade has protected the US from high debt levels, but there are increasing signs that its status as the world’s reserve currency is under threat.

Ratings agency Fitch downgraded US debt from its top rating of AAA to AA+ in August last year, citing “continued deterioration in governance standards”.

And in November, Moody’s warned it could remove the government’s AAA rating while downgrading its outlook from stable to negative.

“Even if a country issues a major reserve currency, even if the country is a dominant geopolitical power, the country just won’t save it,” Cullum Clark told the WSJ.

“They are losing that status.”

Yale historian Professor Paul Kennedy warns that Asian countries, including China, hold huge amounts of US debt in the form of government bonds.

He said they now have the power to create a seismic threat to America’s status if they “just decide, for some reason of a political dispute with the US, to dump a huge amount of government funding.”

“I’ve been asking my economist friends about this conundrum… a very, very large and in some ways overextended superpower that is able to issue more and more of its currency-denominated bonds without, shall we say, penalty. ‘ he said.

His 1987 book The Rise and Fall of the Great Powers helped focus policymakers’ attention on the dangers posed by debt, which bore fruit in falling debt-to-GDP levels in the 1990s.

And other countries, including Denmark, Sweden, Finland and Canada, have managed to reduce their debt spending in recent years despite the impact of the pandemic.

But the national debt has taken a back seat so far in the presidential race, with Republicans promising tax cuts and Biden promising no increase in federal taxes for families making less than $400,000 a year.

Donald Trump’s 2017 tax cuts are set to expire next year, but Biden said he would extend at least some of them for low- and middle-income earners.

Trump himself has said they will all be extended if he returns to the White House, potentially costing an additional $5 trillion over 10 years.

“The damaging effects of higher interest rates, which support higher interest costs on the huge existing debt burden, continue,” said Michael Peterson, executive director of the fiscal think tank Peter G. Peterson Foundation.

“It’s the definition of unsustainable.”