The United States may finally be facing imperial overstretch. Despite years of speculation, the country's global military, economic, and financial dominance has remained intact. However, fast-changing geopolitics and a habit of borrowing from tomorrow to pay for today's wars are threatening Washington's status.
Debt-Fueled Conflicts
This century, the U.S. has embarked on wars of choice, borrowing heavily to fund them. The conflict in Iran alone costs an estimated US$2 billion per day in short-term direct costs. The U.S. public debt-to-GDP ratio is set to exceed its post-World War II high. President Donald Trump has submitted a national defense budget request for 2027 of US$1.5 trillion—double the 2020 figure—excluding his latest war of choice.
Suddenly, the risk of overstretch appears very real to both allies and adversaries. When Trump visited Chinese President Xi Jinping last month, Xi referenced the concept of overstretch proposed by ancient historian and general Thucydides over two millennia ago.
The Thucydides Trap
“Can China and the U.S. overcome the Thucydides trap?” Xi asked. Thucydides' argument, originally applied to Athens' fall, holds that dominant powers decline when financial and military costs of maintaining external security exceed domestic productive capacity. Rising powers also challenge incumbents, precipitating a loss of primacy.
This concept explains the end of the British Empire, the fall of Austro-Hungarian and Ottoman empires, and the Soviet collapse. But does it apply to the U.S. today, as Xi implied?
America's Unique Imperialism
For much of the 20th century, the U.S. was less vulnerable than earlier hegemons like Britain because it adopted less territorially expansionist—and thus less expensive—imperialism. Washington preferred political, economic, and soft power within the rules-based international order it helped create, with occasional aberrations like Vietnam.
Since the 1990s, both Democratic and Republican presidents have pursued more interventionist policies in the name of humanitarianism, democracy, and American values—though some saw this rhetoric as a mask for realism. Now, debt-fueled wars may finally catch up with the superpower.
