Submitted by Simon Black via SovereignMan.com,
According to Jacques Necker, everything was just fine.
The year was 1781, and Necker, France's finance minister, had just published a report called Compte Rendu au Roi, an accounting of French public finances.
Necker's report showed that, despite extraordinary public services and military spending, France had a net credit position of +10 million livres.
In other words, the country was in perfect fiscal health.
It turns out that Necker had cooked the books.
Rather than being 10 million on the positive side, France had racked up 520 million livres worth of debt and could no longer afford to pay interest.
France had spent decades accumulating prodigious debts. They built monuments, parks, and splendid cities that still inspire awe today.
They explored the world and expanded their empire. They engaged in almost constant military conquest in far-away lands.
This all came at great cost. But it never seemed to matter.
The French government knew they were the world's dominant superpower, and they overspent their national income as if it were their divine privilege to do so.
As William Olphus describes in his book Immoderate Greatness: Why Civilizations Fail, the French "tended to see the natural world as cornucopian- that is, as a banquet on which they were free to gorge without limit."
Nearly all superpowers see the world in this way. 'We're #1 therefore we no longer have to be fiscally prudent.'
Sir John Glubb, having seen his own British ...