“You will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you” (Deut 15:6).
The promise to the nation of Israel was conditional upon their obedience. The points we wish to draw from it: (1) When a nation is producing more than it consumes, it is able to lend to other nations. (2)This is advantageous in terms of the relationship between those nations. “The rich rule over the poor, and the borrower is servant to the lender” (Prov 22:7).
In a mere 20 years, the United States has gone from being the world’s #1 creditor nation to being the #1 debtor nation. And with its massive projected deficits, this is not about to change in the near future. When countries like Italy, Thailand, Poland, Turkey and Switzerland can each accumulate larger foreign exchange reserves than the United States, there is no doubt that the world is changing dramatically.
How did the USA switch so quickly from being the world’s leading lender to becoming its leading borrower? Let’s consider this from a historical perspective.
A historical perspective
During my lifetime, two wars have played significant roles in the rise and fall of empires. World War II accelerated the demise of the British Empire, the largest and most powerful the world has ever seen. It also terminated the ambitions of the rapidly emerging Third Reich. That war also marked the emergence of the American and Soviet empires, the latter in the traditional format, the former sometimes more subtle in the exercise of its global power.
Then came the Cold War, marking the epic struggle between these two superpowers. The eventual American triumph was rooted in its industrial and technological prowess. Those muscles had been strengthened during World War II.
For several subsequent decades, the USA manufactured goods with unsurpassed efficiency. They sold their products profitably to other countries. America lent money to other nations. American workers enjoyed a steadily rising standard of living, proportionate to their increasing productivity.
Then Asian countries started producing goods more efficiently. Americans purchased these products, sending cash to their new competitors. Products flowed from China to the USA. Dollars flowed from the USA to China.
China spends around 55% of that income, while saving about 45%. With these savings, China buys US Treasury Bonds. China is now America’s largest creditor. So the US regularly sends them even more dollars, in the form of interest payments. “The borrower is servant to the lender.”
The decline and fall of empires
During the past two decades, America’s high standard of living was artificially sustained by excessive borrowing, by individuals, by corporations, and by governments. Government policies encouraged foolhardy lending practices by irresponsible financial institutions, in order to allow millions of imprudent Americans to purchase houses they could never, ever afford. And the house of cards eventually started to collapse.
One hundred years ago, the British were singing proudly, “Rule Britannia! Britannia rules the waves. Britons never, never, never shall be slaves!” They had long known the significance of, “You will rule over many nations but none will rule over you.” But even their empire finally followed the path of all its predecessors.
In its place emerged the United States of America. But by the time the Twin Towers of the World Trade Center collapsed, US economic dominance had passed its peak. Now the federal government intends to raise its debt level to unprecedented heights. And the standard of living of many millions of Americans will inevitably drop. Let’s put this prospect into personal perspective.
A personal perspective
World War II ended when I was six. From my childhood in South Wales, I have distinct wartime memories. Tragedy was not losing your house to foreclosure, but losing it to the Nazi bombing campaign. Tragedy was not having to move your family into more modest accommodation; it was losing them to enemy bombs.
Losing your job, losing your business, losing your house, going broke — such developments are not pleasant, but they are hardly the end of the world. Adjusting to a lower standard of living is not easy, but it does not kill us. And hopefully we come to realize that the important things in life involve relationships, principles, convictions, values and activities, not stuff.
An international perspective
Let’s consider some international implications. “The borrower is servant to the lender.” The principal lenders are now China, other emerging Asian powerhouses, and the Middle Eastern oil-producing countries. Their power and influence will rise; that of the United States will decline. Consequently, the very existence of the nation of Israel will one day be threatened to a degree we have not previously witnessed.
We have noted the role of two 20th century wars, one hot, one cold, in shaping world events. We know that, in the future, yet another war, a very hot one, will reshape the global power structure.
In Zechariah 14:2, we read of the divine intention to “gather all the nations against Jerusalem to battle.” For most of the past two millennia, this prediction would have nowhere near the potency it has today. Especially when we relate the term “all the nations” to the “United Nations.” Prior to the 20th century, such a collective was unknown. So previously, this prediction would have lacked clear credibility.
At the United Nations, there is widespread animosity towards Israel. And little support, apart from that of the United States, its principal protector, humanly speaking.
Verse 12 suggests that nuclear warfare could be involved. “This is the plague with which the LORD will strike all the nations that fought against Jerusalem: Their flesh will rot while they are still standing on their feet, their eyes will rot in their sockets, and their tongues will rot in their mouths.”
The countries now possessing nuclear weapons include USA, Russia, China, UK, France, Israel, India and Pakistan. North Korea and Iran are moving in that direction. So any development that could reduce the ability, or the willingness, of the United States to continue to protect Israel is highly relevant.
“When these things begin to take place, stand up and lift up your heads, because your redemption is drawing near” (Luke 21:28).