Bloomberg columnist Niall Ferguson says that due to this the US is not in a position now to wage war over Taiwan, which it is moving so hard to do.
He says mutual assured financial destruction will be achieved at best, should the war take place.
In the eyes of Europeans, the US economy is doing just fine: full employment, consumers continue to spend, and inflation is falling after a spike in 2022б he argues. However, this apparent prosperity masks serious structural fiscal weakness, the article says.
While the debt was $19.9 trillion when Donald Trump was inaugurated, it is now close to $32.3 trillion.
From January 2020 to its peak last April, the size of the Fed’s balance sheet more than doubled from $4.2 trillion to just under $9 trillion.
Under these circumstances, Ferguson finds it hard to see how a geopolitical confrontation between the US and China could be financially viable even without taking into account military and naval differences.
He concludes that it is completely out of the question that the US will be able to deal with the negative financial consequences of a war over Taiwan.