History shows us that having too much debt during an economic downturn leads to a classic, self-reinforcing cycle where:
- The empire can no longer borrow the money to repay its debts
- It prints a lot of new money, which devalues the currency and raises inflation
- Living standards decline, leading to the rise of political extremism
- Turbulent economic conditions undermine productivity and there is conflict about how to divide the shrinking resources
- Populist leaders emerge pledging to take control and bring about order