creation to accomplish this increase. Remember, to be able to pay back debt, you must earn more from investing it than the amount of the debt plus interest. If your return on investment is negative 85 percent, as has been the case with global GDP per new debt dollar since 2000, 134 you are transmuting your real wealth into income and slowly (but surely) going insolvent. It’s as if you look at your bank account balance but treat it, instead, as your paycheck. In effect, we’re running a Ponzi scheme on our own culture. We are enjoying the spoils today and leaving the debt to our children and theirs. This is what happens when people believe that money — rather than energy — powers human economies. Under this logic, if there is more money in existence, the world is a wealthier place, right? If we managed the economy based on the money already in existence (in effect having a “set” amount of money reflecting actual resources), the economy would tend to naturally slow down and shrink as various limits become evident. But debt “created out of nothing” acts a bit like economic methamphetamine, obscuring any natural limits and sending signals to keep the economy revving and consuming at an ever-higher pace, even if the debts are unlikely to ever be repaid. TaaL: Debt and Meth, an apt comparison. But I understand that if you take more than a certain dose, or for too extended a period, methamphetamine stops speeding you up. Instead, you start sweating, running a fever, lose muscle control, become disoriented and double over in pain. Maybe that is why you see so few healthy-looking long-term meth addicts. Be that as it may, back in the days before you fell into the “carbon curse” monkey trap, your species – like all others – lived on natural energy flows. That ’s why your species once considered it sinful and illegal to charge interest on loans; the sin of Usury. Interest on money really was an antisocial thing to do because the size of the real economy was the same from year to year, so the charging of interest inherently impoverished someone else. From my vantage point, for the last couple hundred years you’ve been mining a virgin world’s unspoiled natural and living resources, supercharged by fossil energy, leading to a temporary period in which the economy got bigger in energy and “stuff” every year for as far back as your short human attention spans can recall. Against that very unusual and inherently temporary reality, getting paid interest on debt came to seem as natural as pooping after eating prunes. Why be fiscally constipated when you can get gentle relief from a good dose of debt?
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