Michael Mosbacher responds to Keith Windschuttle:

I’d like to take issue with one part of your paper. You criticize the Niall Ferguson idea of decline based on increased government expenditure, but you’re much too optimistic about how easy it is for government expenditure to be cut. There haven’t been any cases of it. You give the example of Margaret Thatcher, but all Margaret Thatcher achieved was a reduction in the rate of increased government expenditure. There have been no cases in Western Europe or in the United States of falling government expenditure. Then you make a point about debts, and how debt burdens are still much lower than defense expenditure. But that’s a factor of historically low interest rates. If interest rates rise to their median historical level, the debt burden, the cost of debt, will shoot up very quickly.

If interest rates rose to 7 or 8 percent, the cost of servicing...


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