Historian Niall Ferguson introduces a principle suggesting that a great power is at risk of decline when its debt servicing costs surpass its defense spending. This threshold, termed the “Ferguson limit,” indicates a tipping point where escalating debt obligations limit the resources available for national security.

Ferguson uses historical case studies to show it is rare (but not unprecedented) for a great power to return to the right side of the Ferguson limit. For context, the United States’ net interest payments reached 3.1% of GDP last year, overtaking defense spending at 3.0% for the first time in nearly a century.

Note: A shorter version was published in the Wall Street Journal.