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"Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least th

"Isn't the primary reason to worry becuase our global economy is founded on debt? Debt only works if the future is more valuable than the present by at least the interest rate on the loan writ large across the global economy." Yes, but very few people know this. https://ourfiniteworld.com/2011/02/21/there-is-no-steady-state-economy-except-at-a-very-basic-level/ https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta...

gruez 3y ago
>https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta... That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion. >But overall, there is no evidence that fossil fuel use, or even oil use, can be divorced from economic growth. If there is a big decline in fossil fuel use, it will translate to a decline in economic growth. Yes there is: https://ourworldindata.org/co2-emissions#many-countries-have-decoupled-economic-growth-from-co2-emissions-even-if-we-take-offshored-production-into-account https://ourworldindata.org/co2-emissions#many-countries-have... >The need for economic growth in order to pay back debt even applies to our money supply itself. Money is loaned into existence. This happens when a commercial bank makes a loan and deposit at the same time. The problem is that when the money is created, not enough money is loaned into existence to pay back the interest as well. So economic growth is needed to create the additional money so that the debt can be paid back with interest. This ignores the existence of a central bank, which can print money at will. >The problem with going to a system without fossil fuels and with much less debt than we have today is the fact that the world supported fewer than one billion people in 1750. There are now nearly 7 billion people in the world. The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet. Both vastly increased productivity and thereby the amount of people the world could support. >If governments were to take away fossil fuels, or even reduce their use significantly, it would likely cause a crash of the financial system "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP. Other estimates put the cost of decarbonizing the economy a bit lower or a bit higher, but they are all in the low single digits of annual global GDP." https://time.com/6132395/two-percent-climate-solution/ https://time.com/6132395/two-percent-climate-solution/
- Beijinger 3y ago
  "That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion." I consider this person to be one of the smartest persons I know. "This ignores the existence of a central bank, which can print money at will." This does not solve the underlying problem. You will get hyperinflation but the money is useless. https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-shrinkage-in-energy-supply-leads-to-conflict/ https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-... "The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet" We can only sustain this with modern technology that is developed by capitalism. Production is pre-financed in expectation of a higher return. If the growth model collapses, so will capitalism. Capitalism is not the same as a market economy. We had a market economy before capitalism. The point Gail makes is that a society without capitalism may fall to a technology level seen before the industrial revolution. A society like the Amish is basically stable in contrast to our model. "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP." Which does not change the underlying mathematics. See also: https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ "But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. " And Wealth And Energy Consumption Are Inseparable https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...
  - JumpCrisscross 3y ago
    Smart people can be wrong when they lack domain knowledge. That article is riddled with basic errors. Steady-state economies can exist with debt—it’s how ancient non-imperial economies worked. Debt jubilees aren’t the only way to erase debt—we use bankruptcy, which is more targeted and continuous. As for energy, look up energy intensity of GDP. It’s falling. (The author seems to conflate fossil fuels and energy.)
    - Beijinger 3y ago

gruez 3y ago

>https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta https://ourfiniteworld.com/2011/02/21/there-is-no-steady-sta... That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion. >But overall, there is no evidence that fossil fuel use, or even oil use, can be divorced from economic growth. If there is a big decline in fossil fuel use, it will translate to a decline in economic growth. Yes there is: https://ourworldindata.org/co2-emissions#many-countries-have-decoupled-economic-growth-from-co2-emissions-even-if-we-take-offshored-production-into-account https://ourworldindata.org/co2-emissions#many-countries-have... >The need for economic growth in order to pay back debt even applies to our money supply itself. Money is loaned into existence. This happens when a commercial bank makes a loan and deposit at the same time. The problem is that when the money is created, not enough money is loaned into existence to pay back the interest as well. So economic growth is needed to create the additional money so that the debt can be paid back with interest. This ignores the existence of a central bank, which can print money at will. >The problem with going to a system without fossil fuels and with much less debt than we have today is the fact that the world supported fewer than one billion people in 1750. There are now nearly 7 billion people in the world. The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet. Both vastly increased productivity and thereby the amount of people the world could support. >If governments were to take away fossil fuels, or even reduce their use significantly, it would likely cause a crash of the financial system "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP. Other estimates put the cost of decarbonizing the economy a bit lower or a bit higher, but they are all in the low single digits of annual global GDP." https://time.com/6132395/two-percent-climate-solution/ https://time.com/6132395/two-percent-climate-solution/

Beijinger 3y ago
"That article is so riddled with issues it's hard to take it seriously even if you believe the underlying conclusion." I consider this person to be one of the smartest persons I know. "This ignores the existence of a central bank, which can print money at will." This does not solve the underlying problem. You will get hyperinflation but the money is useless. https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-shrinkage-in-energy-supply-leads-to-conflict/ https://ourfiniteworld.com/2020/11/09/energy-is-the-economy-... "The world supported less than 1 billion people in 1750 because the industrial revolution and the green revolution wasn't a thing yet" We can only sustain this with modern technology that is developed by capitalism. Production is pre-financed in expectation of a higher return. If the growth model collapses, so will capitalism. Capitalism is not the same as a market economy. We had a market economy before capitalism. The point Gail makes is that a society without capitalism may fall to a technology level seen before the industrial revolution. A society like the Amish is basically stable in contrast to our model. "In a recent poll of climate economists conducted by Reuters, most agreed that getting to net zero would cost only 2% to 3% of annual global GDP." Which does not change the underlying mathematics. See also: https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ https://dothemath.ucsd.edu/2011/07/galactic-scale-energy/ "But let’s not overlook the key point: continued growth in energy use becomes physically impossible within conceivable timeframes. " And Wealth And Energy Consumption Are Inseparable https://www.declineoftheempire.com/2012/01/wealth-and-energy-consumption-are-inseparable.html https://www.declineoftheempire.com/2012/01/wealth-and-energy...
- JumpCrisscross 3y ago
  Smart people can be wrong when they lack domain knowledge. That article is riddled with basic errors. Steady-state economies can exist with debt—it’s how ancient non-imperial economies worked. Debt jubilees aren’t the only way to erase debt—we use bankruptcy, which is more targeted and continuous. As for energy, look up energy intensity of GDP. It’s falling. (The author seems to conflate fossil fuels and energy.)
  - Beijinger 3y ago