"Ferguson's Law states that 'any great power that spends more on debt servicing than on defense risks ceasing to be a great power.' This is because the debt burden draws scarce resources towards itself, reducing the amount available for national security, and leaving the power increasingly vulnerable to military challenge."
"The Spanish Empire in the 16th Century exemplifies the consequences of over-reliance on debt financing, which ultimately undermined the position of its successors."
Interest payments on the U.S. national debt are projected to exceed $1 trillion by 2026, equating to $88 billion monthly. This surpasses combined spending on defense and education. The U.S. Treasury has already crossed this threshold in 2024, marking a significant period where debt interest payments outweigh military expenditures. Both political parties have contributed to the rising debt. Ferguson's Law warns that spending more on debt servicing than defense risks diminishing a nation's power, as seen in historical examples like the Spanish Empire.
Read at Fortune
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