As you well know by now, in reaction to the provisions of the Affordable Care Act, President Barack Obama’s signature health care law, the GOP recently forced the government to shut down many of its operations. The national parks are closed. Many Head Start programs aren’t operating. Hundreds of thousands of government employees are furloughed, which means they don’t get paid until the government passes a continuing resolution, and may never receive back pay for the time they were forced to stay home.
This behavior, complained Senator Carl Levin of Michigan, is a very destructive way to run a state. Shutting down the government, he said, is “not fighting for your position, that’s wanton destruction.”
We cannot consistently continue operating like this, many pundits argue. Chuck Schumer of New York was even more forceful. “Never before—never before in our history,” he said, “has one party threatened a government shutdown if they don’t get 100 percent of what they want on an issue totally unrelated to the budget.”
That may very well be true for the United States, but it’s not at all rare for fiscal negotiations among certain large states. That doesn't mean, though, that it ever works.
Majority leader Harry Reid blasted the House GOP for governing with “a banana Republican mindset.” But this is off, too. It’s not small states in Central America that historically have large-scale budget problems. It’s actually a feature of large, powerful, and declining states and their governments.
As a state becomes larger and more powerful, it must spend greater sums of money to keep the empire running. As Lieutenant Colonel Greg Mosser wrote in his U.S. Army War College master’s thesis, there are real patterns here, and they’re not just about the 2014 budget and Obamacare:
Nations that reach global supremacy have economies that were built upon years and years of positive forces, all cumulatively pushing to a crescendo that is powerful and resilient. Once at the pinnacle, however, a nation’s attitudes and collective values often change and slowly dampen the powerful economic force that propelled it to its state. These same attitudes and values often result in behaviors that enable another nation to build its economy to one of global superiority. With slight variations on the precise factors, the cycle perpetuates throughout history.
Power gets states into more and more desperate circumstances, which worry some politicians, and so they make a great show out of saying enough is enough, and it’s time to start all over and “spend within our limits.” They take a look at the balance sheet and then threaten extreme action. Let’s just shut the whole thing down. Or, if we starve the funds then people will realize what a problem we’ve got and restructure their priorities and start to spend responsibly.
But a quick look to history reveals that this is a structural problem statesmen generally can’t correct, no matter what tactics they use or what kind of government in which they operate. Powerful states tend to overspend because their influence leads them to have large, expensive commitments. According to a New York Times review of Paul Kennedy’s 1988 book, The Rise and Fall of the Great Powers:
The more states increase their power, the larger the proportion of their resources they devote to maintaining it. If too large a proportion of national resources is diverted to military purposes, this in the long run leads to a weakening of power. The capacity to sustain a conflict with a comparable state or coalition of states ultimately depends on economic strength; but states apparently at the zenith of their political power are usually already in a condition of comparative economic decline. ... Power can be maintained only by a prudent balance between the creation of wealth and military expenditure, and great powers in decline almost always hasten their demise by shifting expenditure from the former to the latter. Spain, the Netherlands, France and Britain did exactly that. Now it is the turn of the Soviet Union and the United States.
They also have a real and very destructive tendency toward what might be termed the government of no. According to a fascinating piece in The Atlantic by Rob Goodman and Jimmy Soni, by 60 B.C.E Rome’s Eastern provinces were decimated by war and several years of drought. Public contractors were losing money on the region and wanted to renegotiate contracts (at lower rates). The state’s powerful businessmen supported the reform, but the statesman Cato refused. Contracts were not a matter for debate and compromise. The contractors must uphold the contracts to which they had agreed, he argued.
So adamant was Cato that he declared that not only would the publicani [government contractors] get nothing, but he would shut down the entire Senate until they went away. In that spirit of moral purism, Cato began a months-long campaign of obstruction that would bring the Senate to the point of paralysis.
He won, technically, but he had also earned the anger of the rich men who held the contracts. Cato pursued his destructive policy through a familiar tactic, the filibuster, which he used to gum up the works of government, prevent the state from enacting necessary reforms, and generally force compromise.
Julius Caesar, understandably frustrated by the Senate’s incompetence as far as running the government went, simply assumed more of the budgeting powers the Senate had previously enjoyed but basically declined to perform. Goodman and Soni:
Caesar now had all the cover he needed to take the pivotal land bill directly before the Roman people. His strategy was constitutionally questionable, and it was fiercely opposed by Cato and his faction, but Caesar effectively made the case that the Senate's inaction had forced his hand. As one ancient historian observed, Caesar could now credibly claim "that he was driven forth into the popular assembly against his wishes, and was compelled to court its favor by the insolence and obstinacy of the Senate."
In Renaissance Spain, the Habsburg Empire grew so large it, too, saw massive budget problems. At the height of its power, the crown declared bankruptcy four times (in 1557, 1560, 1576, and 1596). There were many factors, but continuous wars and one of those inefficient medieval taxation schemes (no taxes on the aristocracy or the churches, which held the most property), not to mention weak monarchs, made the problem impossible to address responsibly.
The state was so overextended that by the late 16th century the entire army was paid out of silver mines in South America, which at one time accounted for some 20 percent of the empire’s total budget. Many subjects paid their taxes directly to Spain’s creditors, without the money even passing through the treasury in Madrid. Because this wasn’t a democracy it wasn’t exactly the same political problem we have today—there was no pretense of curtailing spending for the good of the subjects and “our grandchildren,” now a legislature with the power to filibuster—but there are similarities.
The Ottoman Empire, as it neared its end, also had a series of serious budget problems that it tried, unsuccessfully, to address. As Turkish academics Seda Ozekicioglu and Halil Ozekicioglu write:
The first legal regulation on budget was the statute enacted in 1855. In this statute, the provisions on how the state budget would be prepared, examined and approved and how the application and audits would be performed were regulated. Due to the statute, the income and expenditure estimations carried out by the Ministry of Finance would be written down on separate books and submitted to ... the government. ... The budget (“balance book”) would be read in ... [the General Parliament] with the presence of all ministers for general discussion and the income and expenditures of each state office would be negotiated separately. Upon the decision taken by majority, the whole budget would be voted and the transaction would be concluded.
Coupled with vast foreign debts, one can see how this sort of policy quickly becomes a problem. While such reforms sound reasonable, and even necessary, they never seem to work, yet each generation presents them as something new and untried.
Despite the reforms, the basic structural problems remained. The state simply could not take in enough revenue to continue maintaining the Ottoman Empire at the level it needed to meet expenses. As the Lieutenant Colonel Greg Mosser explains, “overwhelming economic strength can provide substantial short-term forgiveness for bad decisions, [but] no amount of economic strength can withstand repeated bad decisions.” But repeated bad mistakes might be more a feature of large empires than an anomalous policy glitch of some of them.
The Ottoman Empire continued its decline. The Empire defaulted on its loan repayments in 1875 and when World War I began the state was still $716,000,000 in debt (that’s $16 billion in today’s money). It finally collapsed in 1922.
Democracy, of course, is a wonderful thing, and the democratic budget reforms of the Ottoman Empire sure look progressive. But they also look sort of desperate, at least in retrospect.
Certainly there are some fairly serious immediate financial problems impacting the American people as a result of the government shutdown. But in terms of a country’s general historical path—think Spain and its four bankruptcies—serious structural problems and desperate efforts at reform may just be a look at what’s yet to come.