By Scott Perry

History rarely announces a great power’s decline. More often, warning signs appear in government borrowing, rising military spending, weakening financial confidence, and the growing cost of maintaining influence abroad.

Then an international crisis comes along, revealing how much has changed.

For Great Britain, that moment came in 1956 at the Suez Canal. But Britain’s financial decline had begun more than forty years earlier, with the outbreak of the First World War in 1914.

Today, as the United States confronts Iran over the security of the Persian Gulf and the Strait of Hormuz, Americans should look to that history. Not because America is destined to repeat Britain’s experience, but because the link between military power and financial strength has not disappeared.

The conflict with Iran is a national security issue. It is also an economic issue that directly affects American households.

It affects gasoline prices, the purchasing power of retirement savings, the cost of borrowing, and possibly the federal government’s ability to meet future obligations.

Foreign policy doesn’t stay abroad forever. Eventually, its costs come home.

At the beginning of the twentieth century, Great Britain occupied an international financial position that, in some respects, was comparable to the position of the United States today.

London was the hub of global banking and international lending. Sterling was a leading currency for trade and financial reserves. British investors held substantial assets worldwide, while the Royal Navy protected the maritime routes on which Britain’s commercial empire depended.

Military strength and financial leadership reinforced each other.

When the First World War began in 1914, Britain entered a conflict that demanded unprecedented spending.

Maintaining armies, producing weapons, supporting allies, and sustaining the war effort consumed resources on a scale that nineteenth-century governments had rarely imagined.

Britain raised taxes, borrowed heavily, sold overseas assets, and increasingly relied on American financing.

Meanwhile, the United States emerged from the war as a stronger international creditor.

This was an important turning point. Britain helped win the war, but victory came at an enormous financial cost.

Winning a military conflict did not necessarily mean emerging from it economically stronger.

The Second World War accelerated Britain’s financial transformation.

Once again, Britain fought for its survival and ultimately won.

Yet the costs were staggering.

Britain liquidated foreign investments, took on new debts, and relied heavily on American assistance.

The Lend-Lease program helped sustain Britain’s war effort. Its termination in 1945 intensified Britain’s immediate financial difficulties.

The Anglo-American loan agreement that followed provided desperately needed financing, but it also demonstrated how far Britain’s financial independence had diminished.

In 1944, representatives of the Allied nations met at Bretton Woods, New Hampshire, to design the postwar international monetary system.

The resulting arrangements placed the American dollar at the center of the new system. The dollar was pegged to gold, while participating currencies maintained fixed exchange rates against it.

The pound remained important, but the United States now had the financial resources and economic influence to lead the international monetary order.

Britain had not suddenly grown weak.

It still had substantial military forces, diplomatic influence, advanced industries, and international commercial relationships.

It no longer had the financial independence it had enjoyed before 1914.

The final demonstration came in October 1956. Earlier that year, Egyptian President Gamal Abdel Nasser nationalized the Suez Canal Company.

For Britain and France, the canal was far more than a waterway. It was a strategic passage linking European commerce to the Indian Ocean and the Middle East’s oil-producing regions.

Britain and France, working with Israel, launched military action against Egypt.

Their armed forces could carry out the operation.

But they had failed to account for one decisive factor.

The United States opposed their intervention.

As international pressure mounted, investors questioned Britain’s ability to maintain sterling’s value. The Bank of England had to spend dollar reserves defending the pound’s fixed exchange rate.

Britain needed financial assistance, and American support was critical to securing it.

President Dwight Eisenhower’s administration used its financial and diplomatic influence to pressure Britain to withdraw.

Britain complied.

The lesson was unmistakable.

Britain still had military power, but it could no longer use it independently when doing so threatened its financial stability or clashed with American policy.

Suez did not immediately end sterling’s role as a reserve currency. Nor did it create dollar dominance; that shift was already well underway.

Instead, Suez revealed a fundamental change in international power.

Britain had the military capability to intervene, but not the financial independence to sustain it against American opposition.

The country that had once financed much of the world’s commerce now depended on another nation’s financial cooperation to maintain its international position.

Forty-two years separated the outbreak of the First World War from the Suez Crisis.

That was how long it took for a profound shift in financial power to become unmistakable.

Seventy years after Suez, the United States faces a confrontation involving another strategically important waterway.

The Strait of Hormuz connects the Persian Gulf with international shipping routes. It is one of the world’s most important passages for petroleum and liquefied natural gas.

Disruption there can affect energy prices, shipping insurance, transportation costs, and international trade.

The Trump administration has defended its military campaign against Iran as necessary to prevent Iran from acquiring nuclear weapons, counter threats to American interests, and restore security to international navigation.

Those objectives deserve serious consideration.

Iran has demonstrated an ability to threaten commercial vessels and American personnel. A government cannot responsibly dismiss threats to its citizens, allies, or vital international trade routes.

Nor can the United States assume that withdrawing military forces or avoiding confrontation would automatically produce stability. Reagan’s withdrawal from Lebanon in 1984, for example, gave bin Laden the impetus to attack the United States nearly two decades later.

Military intervention has costs, but so does failing to deter aggression.

That is the difficult responsibility of national leadership.

At the same time, military necessity does not eliminate the obligation to consider economic consequences.

The administration must weigh the risks of action against the risks of inaction, set achievable objectives, and determine how to sustain them financially.

Congress shares responsibility for examining those decisions, authorizing expenditures, and exercising oversight.

America’s financial difficulties did not begin with the current administration. Federal debt accumulated through wars, recessions, tax decisions, entitlement commitments, emergency spending, and fiscal choices made under successive administrations of both political parties.

Nevertheless, current decisions influence future obligations.

That is why the Iran conflict must be evaluated not only through military developments but also through its effects on the American economy.

Most Americans do not follow the Treasury bond market.

They should understand why it matters.

When the federal government spends more than it collects in revenue, it generally finances the difference by issuing Treasury securities.

Investors buy those securities expecting the government to repay the principal and make the promised interest payments.

The interest rates investors demand affect the government’s borrowing costs.

Those rates also influence financial markets throughout the economy.

A prolonged international conflict can create several pressures simultaneously.

Higher energy prices can contribute to inflation. Inflation expectations can push interest rates upward. Increased federal borrowing can further pressure financing costs, depending on market conditions.

The result can be felt far beyond Washington.

Consider a household purchasing a $300,000 home with a $240,000, thirty-year mortgage.

At a 5% interest rate, the monthly principal-and-interest payment would be approximately $1,288.

At 7%, that payment would rise to approximately $1,597.

That is an additional $309 every month, or approximately $3,708 annually.

The house has not become larger. The buyer has not received additional value.

The cost of financing the same purchase has increased.

A similar problem confronts families financing automobiles, businesses borrowing for expansion, and consumers carrying variable-rate debt.

Existing fixed-rate borrowers are generally protected from immediate increases in their contractual interest rates. But new borrowers, and those whose rates reset, can face substantially higher payments.

The consequences for savers matter just as much, though they differ by investment.

When market interest rates rise, existing fixed-rate bonds generally decline in market value.

That means a retirement account holding bond funds may lose value even though the underlying investments were bought for their relative stability.

An individual who holds a conventional Treasury bond to maturity and receives all promised payments faces a different situation from an investor who must sell that bond before maturity.

Higher interest rates can also benefit savers by increasing the yields available on newly issued bonds, certificates of deposit, and savings accounts.

The larger danger is the combination of market volatility and persistent inflation.

Consider someone with $100,000 in savings.

If inflation averages 4% annually for five years, that $100,000 would have purchasing power equivalent to approximately $82,200 in today’s dollars, assuming the account earned no interest.

The account statement might still show $100,000.

But the money would buy considerably less.

For retirees living on fixed incomes, that distinction can be devastating.

The danger is not simply losing dollars.

It is losing the purchasing power those dollars were intended to preserve.

Another consequence deserves greater public attention.

When federal borrowing costs rise, the government must devote more revenue to interest payments.

Those payments do not build bridges, educate children, improve military readiness, or modernize infrastructure.

They compensate lenders for financing government debt.

Higher interest expenses can narrow the government’s choices.

Future leaders may face pressure to raise taxes, reduce spending, borrow more, or accept some combination of those outcomes.

The consequences can extend across generations.

This does not mean every dollar borrowed is wasted. Borrowing can finance necessary defense, infrastructure, emergency responses, and investments that strengthen future economic growth.

The question is whether the long-term benefits justify the costs.

A country that consistently borrows without regard to repayment capacity risks limiting the choices available to future generations.

Britain’s experience between 1914 and 1956 demonstrates why that matters.

The British people did not lose their financial leadership because they lacked courage or military ability.

They faced the cumulative consequences of vast international commitments, two devastating wars, and a shifting global economy, in which the bond market helped determine who held influence over global markets and armies.

America should learn from that experience before financial circumstances begin dictating strategic choices.

It is too early to conclude that America has reached that point.

The United States possesses advantages that Britain lacked in 1956.

The dollar remains the world’s dominant reserve currency. Treasury securities occupy a central position in international finance. America borrows in its own currency and has a much larger and more diversified economy than postwar Britain.

These advantages are substantial.

But they do not excuse complacency.

The key question is whether America can translate its military superiority into sustainable political and economic outcomes.

Can it restore and protect international navigation?

Can the Iranian threat be reduced without an indefinite military commitment?

Can America’s allies share the responsibility for regional security?

Can the government pursue legitimate national security objectives without unnecessarily increasing the financial burden on American households?

Those are not questions of patriotism versus disloyalty.

They are questions of strategy, accountability, and sound government.

A strong national defense requires a strong economy.

And a strong economy requires public confidence in the nation’s financial management.

Americans often think of national security in terms of aircraft carriers, fighter aircraft, missiles, intelligence operations, and military readiness.

All are important.

But national security also includes the financial capacity to sustain those capabilities.

It includes productive industries, reliable infrastructure, a functioning financial system, and a government capable of meeting its obligations.

It includes families who can afford housing, workers whose wages retain purchasing power, and retirees whose savings provide meaningful financial security.

The strength of the United States rests on more than its ability to project military force.

It rests on the economic foundation supporting that force.

When that foundation weakens, military superiority alone cannot guarantee lasting international influence.

Britain learned that lesson over the decades between 1914 and 1956; the United States should not ignore it.

The conflict with Iran is taking place thousands of miles from most American homes.

Yet the financial consequences of international conflict can reach those homes directly.

They can affect fuel prices, grocery costs, mortgage payments, retirement investments, and the financial opportunities available to the next generation.

Citizens deserve clear explanations of national security objectives, realistic assessments of economic costs, and accountability for the results.

Those standards should apply to every administration, regardless of political party.

Government’s responsibility is to protect the nation while preserving the economic strength that makes its security possible.

Citizens must remain informed, examine their representatives’ decisions, and understand how public policy affects their lives.

History provides the warning.

Britain’s financial supremacy did not disappear in a single battle. It diminished over decades until the Suez Crisis exposed the limits of its power.

America’s future is not predetermined.

Its financial strength, military capabilities, institutions, and economic resources provide substantial opportunities to avoid a similar outcome.

But maintaining those advantages requires sound decisions and sustained public accountability.

Foreign policy is not merely an international affair. Its consequences can affect your mortgage payment, retirement savings, household budget, and your children’s future.

Choosing not to vote does not free anyone from those consequences. It leaves the decisions to those who participate.

It is your life. It is your future. Today’s decisions will help shape the America that generations to come will inherit. The Trump administration has put Iran on notice that it cannot have a nuclear weapon, and 47 years of negotiation have not produced any positive conclusion. Higher gas prices are a small price to pay for stability in the Middle East and for our future generations to live in a world with one fewer North Korea. Finally, our parents and grandparents lived with food shortages and rationing to defeat Japan and Germany.

NOW, CAN YOU AT LEAST GO TO THE POLLS AND VOTE!

Scott Perry is an historian, business owner and original thinker.