Linda Bilmes quoted on the cost of debt-fueled wars in the Financial Times

“Trump’s empire of debt”

By John Plender (link to article)

The article quotes Linda Bilmes, who argue that the US may now be risking “imperial overstretch” as debt‑funded wars, big defence budgets and chronic deficits start to weaken its military and financial supremacy. Since 9/11, conflicts from Iraq and Afghanistan to today’s Iran war have been paid for largely by borrowing, helping push public debt and interest costs back toward post‑1945 highs, with no political path to fiscal discipline. This strain is eroding America’s “exorbitant privilege”: central banks are cutting Treasury holdings and buying more gold, rating agencies have downgraded US debt, and a hedge‑fund‑dependent Treasury market has grown more fragile. Analysts warn this could usher in fiscal dominance, constrain the Federal Reserve, raise crisis and stagflation risks, and accelerate a shift toward rival dollar‑ and renminbi‑centred blocs. Drawing on historical cases from Athens to Rome and Louis XIV’s France, the piece suggests Trump’s debt‑fuelled militarism may mark the point where overextension begins to undermine US power.