Energy and Debt
"A society riddled with debt is a society that is reluctant or unable to spend. A lot of that debt has now found its way into housing, with mortgages higher than ever. That’s money we’re using to pay off our home loan that we could be spending keeping the economy moving. In short, it's slowing the speed at which money circulates. So, how do we fix it? The answer, is get rid of the debt." - Phil Dobbie / Steve Keen podcast [support on Patreon]
They're talking about a modern debt jubilee proposed by Steve Keen, Michael Hudson and others.
I would add to the quote.
"A society riddled with debt (and burdened by rising energy prices) is a society that is reluctant or unable to spend.
What are the chances of anything good happening with debt and energy?
With a debt jubilee, the rentiers will have to forego future compound interest income. If they're smart, and recognise the big picture of global collapse, they'll realise that writing off debt is a good deal for everyone. But there's no evidence that that's how they're thinking. Some are talking universal incomes for the sheeple.
If the rentiers squeeze any harder, borrowers and renters won't be able to pay, and additional loss of life will result.
With energy depletion, the energy producers can't stay in business without increasing prices. Prices that households and businesses can't afford. That's because the cost of production keeps going up. They've run out of low hanging fruit. They can't find new energy surpluses if they can't afford to look.
Writing off debt merely defers the unavoidable pain of energy depletion. Depletion is like drinking through a straw. The flow is strong until suddenly, you hit the bottom.
There are plenty who believe that human ingenuity will find a way. That's denial of unpleasant reality.
Energy is the economy, and the pain will ramp up in the next decade or so as depletion kicks in. Economic collapse is much closer.
When the big burn is over, our ability to do prodigious amounts of work will end.
Since work generates heat and waste, the environment may rebound, depending on what damage has been done. In particular, whether a new climate has emerged from the Anthropocene era which is less conducive to life.
Energy depletion will impact food production and population.
We're causing a mass extinction with billions of us having full bellies. Think about the consequences for animals of mass human starvation.
And, as we approach WALL-E world, how are we going to contain long life nuclear waste? It requires a level of complexity that won't exist.
We should ration the earth's remaining affordable dense energy on an equitable, sensible basis. The word Ukraine should be enough to convince you that that's not going to happen.
We're going to hit the brick wall. That's the human way.
If you can, downsize to get out of debt. Relocate to a small community with good soil, rainfall and running water.
- 1 toast