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Monday, September 24, 2007

The Debt Bubble and the Downfall of the Republic

HERE is a fascinating essay on how debt bubbles can contribute to the downfall of a republic. The republic discussed in the essay is Rome, but you can draw similarities between the late Roman republic and the United States all day long.

Some similarities that pertain to this discussion …

  1. Both had housing bubbles
  2. Both had a middle class under stress
  3. In both, cheap foreign labor (slaves in Rome, offshoring in the US) drove down working wages and caused massive economic realignments
  4. In both Rome and the US, there were safeguards to prevent tyranny

In Rome, those safeguards failed. In the US, the story is still being written.

Read the essay by CLICKING HERE.

In related news, I can recommend this book ...
Finally, I'll close this with how Jugurtha famously described Rome back in the day: "A city for sale and doomed to quick destruction, if it should ever find a buyer."

Does that remind you of any famous American cities?

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