The chapter opens with a test of a government that uses one indicator and nothing else. When the world has the way, fast horses are put to hauling dung. When the world lacks the way, warhorses are bred on the borders.
The measure is exact and it is agricultural. A fast horse is an expensive animal and its best civilian use is manure, which is the input a farming economy actually needs. The alternative is breeding cavalry mounts in the frontier zones, which uses the same animals, the same pasture and the same skilled labour for war. There is no third option, because the resource is the same either way.
That is what makes the couplet a diagnostic rather than a sentiment. It does not ask about the ruler's intentions or the state of public morality. It asks where the horses are, and it treats the answer as sufficient.
The rest of the chapter names the underlying fault in one word. There is no calamity greater than not knowing what is enough, and no fault greater than the wish to get. A state that has enough territory and continues to want more will convert its dung carts into cavalry, and the chapter locates the mechanism in appetite rather than in strategy or in threat.
The closing line is a small piece of wordplay that survives translation badly: the sufficiency of knowing sufficiency is lasting sufficiency. The same term is repeated three times in three grammatical positions, and the effect in the Chinese is of a formula closing on itself, which suits a chapter about a condition that has to be its own limit.