The Path of Bankruptcy
Portrait of Philip II of Spain by Antonis Mor, 1560
The United States today has fallen into a very similar situation to the one of Spain in the 1500's under Philip II. The main mistakes both made are the growth of dependency on another nation, the fall of internal economy and continuous war expenditures around the world.
Under the rule of Philip II, Spain was forced to declare bankruptcy four times. Although he ruled the most powerful and wealthy empire at the time, he became too dependent on the outside flow of money for the empire and over time reliant on another nation for income which made him vulnerable and easily influenced. Genoa’s banking forced Spain to declare bankruptcy twice and held great influence over it. Eventually they even made Spain lose a great part of their land. Because of the enormity of the territory, Spain was constantly at war.
Philip II had continuously support his military financially. Throughout his reign, the costs of supplies only increased, further damaging the economy. Like any other ruler would have done, Philip raised taxes. But that did not help since the flow of silver from the Americas had thinned to the extreme. Because of the tax increase, people strayed away from internal business, thus making it hard for the economy to prosper.
The United States, being previously one of the richest nations, can easily be compared to Philip’s Spain. And similar to Spain is the fact that the States seem to always be at war around the world. That of course entails enormous amounts of money, especially considering the technology used by the military. Another mistake that the United States has made is become dependent on China for its economy. They produce and import a lot of the things used in the United Stated. The biggest problem with that is that possibly, if not certainly, eventually China will be able to overtake the U.S.
Currently the U.S. debt is 12 trillion and continues to increase by 4 billion with each passing day, having had tripled since the 1980's. Also the fact that the world is currently undergoing a small depression does not help the matter. The U.S. dollar is at a risk of losing its value due to inflation. What the Government could do, instead of rising taxes, like they are so keen to do, is encourage businesses inside the nation. The Federal government could sponsor large businesses in order to create more jobs and let the economy stabilize. Another thing the government should encourage is national production of supplies. If the economy stabilizes and the U.S. starts paying the debt off to China, than there will be less of a possibility of having to declare bankruptcy.
If the United States continues to unconsciously follow in Spain’s footsteps than it would mean the internal collapse of the nation. Not to mention the loss of the war and exposure of a vulnerable side. Unfortunately the U.S. seems to be headed precisely in that direction. If only they would realize that something that didn’t work 500 years ago won’t work today either, then there wouldn’t be such of a problem. We as humans should learn from our mistakes in the past so we can triumph in the future.
