By the third century Rome was at crisis level due to the severe pressures on the northern borders of the empire. In the east, Rome was threatened by the rise of the Persian empire. In the north, the Germanic tribes including the Visagoths and the Huns posed an ever increasing threat to Rome's security. These issues eventually led to internal economic instability because the Roman government had to continually raise taxes to pay for their massive military effort. As a result, more and more 'government' was required to administer services that were neglected due to rising inflation. Taxes continued to increase, while services rapidly decreased within the empire.
The quote refers to Franklin's belief that big government will eventually cave from the outside in simply because it cannot sustain itself if it bites off more than it can take in.