Debt Rattle Jun 19 2014: Growth When We Don’t Need It

 

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  • #13575

    Russell Lee Levee at Bird’s Point, MO during the height of the flood January 1937 Mostly, it feels like a useless waste of time to wonder why everyone
    [See the full post at: Debt Rattle Jun 19 2014: Growth When We Don’t Need It]

    #13576
    Phil
    Participant

    Ilargi, above:

    “There’s steady state economics, of course, John Stuart Mill, Georgescu-Roegen, Herman Daly, but that field is, for my taste, too strongly linked to Mill’s “The end of growth leads to a stationary state”, while in my view a stationary state is as incompatible with physics, let alone the human brain, as perpetual growth is”

    Nicholas Georgescu-Roegen, in a sction entitled “The Steady State: A Topical Mirage” in his 1975 essay “Energy and Economic Myths”:

    “… there are simple reasons against believing that mankind can live in a perpetual stationary state. The structure of such a state remains the same throughout; it does not contain in itself the seed of the inexorable death of all open macrosystems. On the other hand, a world with a stationary population would, on the contrary, be continually forced to change its technology as well as its mode of life in response to the inevitable decrease of resource accessibility. Even if we beg the issue of how capital may change qualitatively and still remain constant, we could have to assume that the unpredictable decrease in accessibility will be miraculously compensated by the right innovations at the right time. A stationary world may for a while be interlocked with the changing environment through a system of balancing feedbacks analogous to those of a living organism during one phase of its life. But as Bormann reminded us [7, p. 707], the miracle cannot last forever; sooner or later the balancing system will collapse. At that time, the stationary state will enter a crisis, which will defeat its alleged purpose and nature.”

    I think we can safely conclude that Georgescu-Roegen was no fan of ‘steady-state’ either.

    #13577
    Diogenes Shrugged
    Participant

    Contraction brings painful austerity. As a consequence, people naturally struggle for growth. This is understandable, especially from those who have personally suffered from austerity. And it’s especially understandable if they have kids. Growth makes it possible to save something (a surplus) for a rainy day.

    A graph of parabolically increasing growth slides upward through an inflection and gracefully tapers off toward a horizontal asymptote representing the ideal of steady state, no-growth stability.

    I hate to be the bearer of bad news, but that’s the wrong graph. It’s an easy mistake to make, but that curve is actually the left leg of a bell curve. Maximum growth will be followed by contraction. It will not – – indeed, it cannot – – hit an asymptote and stay there. And worse, the right leg of the bell curve will not be a mirror image of the left, it will most likely be steeper.

    The shape of that bell curve probably describes a lot of different things, all joined at the hip. Like economically recoverable oil reserves, human population, environmental destruction, economic freedom, hope for the future, total debt, and even things hard to measure like the sum total of human happiness. When will the peak come? No idea, but I think I need to be more careful what I wish for.

    #13578
    Joe Clarkson
    Participant

    “If anyone can tell me why, I’m open to suggestions.”

    Because we are living beings. Growth is part of the definition of being alive. In spite of our brains, we cannot escape the imperatives to aggrandize and dissipate energy, imperatives that are common to all living things. The only controls on growth are those that come from environmental factors that limit resources to any given population. Every living entity grabs more and more goodies until Nature slaps their ‘hands’ and says, “Enough!”.

    #13580
    ₿oogaloo
    Participant

    Why are we chasing growth? To answer that question we need to conceptually separate economics from the fractional reserve monetary system. Can we have a steady state no growth equilibrium economy? Of course we can, but not with a fractional reserve monetary system. With a fractional reserve monetary system, the economy MUST grow so that debts can be paid back with interest. It is an inherent mathematical feature of the system.

    Once the idea goes mainstream that real growth is not coming back, it will be interesting to see whether people keep hard assets in the global monetary financial system. There is not enough collateral to back all the debts in the system, which will collectively come under increasing pressure when the system stops expanding.

    #13581
    Ken Barrows
    Participant

    Good points in the comments. I think it’s because most humans are lazy. We don’t want to work hard physically, so we delude ourselves into thinking neither we nor our descendants have to toil.

    #13582
    Jef Jelten
    Participant

    First of all pyramid schemes, which is the best definition of the capitalism we have, only exist as long as more rows are being added to the bottom at a constant rate, i.e. growth.

    I know that TAE is all about banking/finance but that is a lagging indicator. The reason we can no longer grow, the reason that debt now matters, is that we no longer “have a da juice” to keep growth happening. Resource constraints are the limiting factor. If we had unlimited resources there would be no limit to debt.

    Either way growth is dead-long live deflation!

    #13583
    Professorlocknload
    Participant

    Perhaps the delay in the economic waters seeking their own level lies in too much faith in our political institutions to take care of us and protect us from any form of discomfort. When that faith is finally shaken, and not before, then change will come.

    The mantra “We must do something” is suggesting we prolong the fallacy that various “interventions” in the course of nature have created, ie; the mess we are in.

    “It” can’t be “fixed” anymore than an earthquake can be prevented, or a tornado, or a drought. Real economic freedom can’t survive and thrive in captivity. Of any sort. Let alone in an environment where corrupt political power defines the value of the life’s blood of economic freedom of association, the money itself.

    Or, as Acton stated “Power corrupts. Absolute power corrupts absolutely.” This applies equally to things economic.

    #13584
    TheTrivium4TW
    Participant

    Diogenes, my bad for taking so long to respond to our last conversation. We are living a very similar life experience – stuck in a literal science fiction reality. In context, I totally understand your frustration – it is my frustration, too. We are definitely on the same team, but, I don’t know if that bodes well for you. 😉

    Ilargi, most people can’t handle “the why.” I keep telling them, but all I literally get is silence. For years.

    The why:

    1. We can’t think rationally because schooling was engineered by the Money Power to teach us to think irrationally. Appeal to Authority logical fallacy is the very basis of Rockefeller engineered schooling. In order to think, one has to reject the logical fallacies, do hard work and, well, be willing to deal with that which is real. It just is and it will hurt feelings. Badly.

    “We all have a tendency to think that the world must conform to our prejudices. The opposite view involves some effort of thought, and most people would die sooner than think – in fact they do so.”
    ~Bertrand Russell, Money Power Technocrat, The ABC of Relativity (1925), p. 166.

    Russell also brings out a valid point beyond our intellectual laziness and logical fallacy programming – once the fallacy has been programmed into us it become our bias. Few people have the intellectual honesty to admit they are wrong… especially the “well schooled.” They were also taught in school to be insecure. Very insecure.

    2. Any debt based monetary system is a prima fascie fraud. It astounds me to see people complain about the machinations of a rigged system when the underlying component of said system is a complete fraud. Money lent into existence is ENGINEERED TO BANKRUPT THE HOST. IT CAN DO NOTHING ELSE. It takes 5th grade math – and I’ve posted it in these comments before.

    If I lend you $20 at 5% interest, in one year you owe me $21 due to the accrual of $1 interest liability on your balance sheet and $1 interest asset on my balance sheet.

    You have $20, you owe me $21 – and I finance your government, too. Muppet.

    Remember, I also control your schooling system, so when I tell those around you how the system works in very simple, THEY STILL CAN’T UNDERSTAND A WORD I SAY. IT IS LIKE I’M SPEAKING IN A FOREIGN LANGUAGE. I’m not shouting, but I am trying to emphasize the point.

    A bailout is when I lend you $20 @ 5%, I put the proceeds into my corporate front pockets and send you a bill for $21 even though you didn’t get any of the proceed… all the while telling you that I’m doing it to save you.

    Again, I observed the effect of the Prussian schooling model and I financed its implementation across the world – I, the international financier, am so far ahead of society that they are like little babies – except that little babies have the good sense to cry when I steal their candy…

    And no, this isn’t some tyrade against Jewish people, 99.xx% of whom are victims of the biggest fraud ever foisted upon humans in the history of planet Earth. The fact so many people are irrationally obsessed with the trivial (skin color, religious affiliation) and completely avoid the relevant (content of character) is a testament to the social programming.

    BTW, have you ever asked, “is a debt based monetary system a fundemantally fraudulent system?” and written an article exploring the answer?

    If not, you really, really should.

    #13585
    TheTrivium4TW
    Participant

    Any solutions involves the average person abhoring anything big and doing business with small, local business almost exclusively. We power the “machine” when we give our debt receipts (aka, money) to The Bigs (they don’t call them the Big Bad for nothing).

    It is literally like paying Cujo to eat us.

    He will, and he will really enjoy doing so… believing that he is “evolved” and you aren’t because only a complete moron would finance their own destruction.

    #13586
    TheTrivium4TW
    Participant

    The monetary system drives growth. As per my previous explanation in this thread, society always owes more money than society possesses. If more money isn’t continually added to the system, the debtors bust out real quicky and the Debt Money Tyrants would minimize the loot they can steal and they also might get outed because the con game might be identified.

    Take a debt chart and a CO2 chart and superimpose one upon the other – you will find a very tight correlation. Debt money drives the economy (until it doesn’t!!!) and the economy drives CO2.

    The banksters blew a bubble in debt – a criminal bubble, BTW (read Section 2A of the Federal Reserve Act) – and also blew a bubble in CO2. They don’t tell you that on the evening news, do they? China’s drowning in pollution, but the establishment is mum on that because they are invested over there and only want to shut down the American competition by driving up energy prices (while blowing even more energy over in China).

    Sun Tzu said “all war is deception.”

    The people want to be deceived, so our future is very, very bleak.

    Get as ready as possible.

    #13587
    p01
    Participant

    There is only one steady state economy possible: the one before grains ans seeds, which still exists in small communities untainted by seed worshiping (not necessarily hunter-gatherers, here’s a small example: https://www.youtube.com/watch?v=jvDIpOPlWJ8). But it is not very popular since it does not give us classics, philosophers, colored rectangular cloths, human-shaped rocks, high stone constructions to drool over deliriously, which could not have have been enjoyed anyway if not for the “criminal” debt. How’s that for an existential dilemma?
    Of course, it could be that it’s just stupid&lazy on one side we don’t like, and criminal cabals on the other side we don’t particularly enjoy.

    #13642
    SteveB
    Participant

    Why? Because we’ve chosen to keep using money and exchange well past the clear evidence that doing so is going to result in our making our planet uninhabitable for our species. Seeing that big picture requires stepping back even farther than you and your readers are used to.

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