{"id":12267,"date":"2015-09-15T07:04:13","date_gmt":"2015-09-15T12:04:13","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12267"},"modified":"2015-09-15T07:04:13","modified_gmt":"2015-09-15T12:04:13","slug":"how-our-energy-problem-leads-to-a-debt-collapse-problem","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12267","title":{"rendered":"How our energy problem leads to a debt collapse problem"},"content":{"rendered":"

How our energy problem leads to a debt collapse\u00a0problem<\/a><\/h3>\n

Usually, we don\u2019t stop to think about how the whole economy works together. A major reason is that we have been lacking data to see long-term relationships. In this post, I show some longer-term time series relating to energy growth, GDP growth, and debt growth\u2013going back to 1820 in some cases\u2013that help us understand our situation better.<\/p>\n

\n

When I look at these long-term time series, I come to the conclusion that what we are doing now is building debt to unsustainably high levels, thanks to today\u2019s high cost of producing energy products. I doubt that this can be turned around. To do so would require immediate production of huge quantities of incredibly cheap energy products\u2013that is oil at less than $20 per barrel in 2014$, and other energy products with comparably cheap cost structures.<\/p>\n

Our goal would need to be to get back to the energy cost levels that we had, prior to the run-up in costs in the 1970s. Growth in energy use would probably need to rise back to pre-1975 levels as well. Of course, such a low-price, high-growth scenario isn\u2019t really sustainable in a finite world either. It would have adverse follow-on effects, too, including climate change.<\/p>\n

In this post, I explain my thinking that leads to this conclusion. Some back-up information is provided in the Appendix as well.<\/p>\n

Insight 1. Economic growth tends to take place when a\u00a0civilization can make goods and services more cheaply\u2013that is, with less human labor, and often with less resources of other kinds as well.<\/b><\/p>\n

When an economy learns how to make goods more cheaply, the group of people in that economy\u00a0can make more goods and services in total<\/em>\u00a0because, on average, each worker can make more goods and services in his available work-time. We might say that members of that economy are becoming more productive. This additional productivity can be distributed among workers, supervisors, governments, and businesses, allowing what we think of as economic growth.<\/span><\/p>\n<\/div>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

How our energy problem leads to a debt collapse\u00a0problem Usually, we don\u2019t stop to think about how the whole economy works together. A major reason is that we have been lacking data to see long-term relationships. In this post, I show some longer-term time series relating to energy growth, GDP growth, and debt growth\u2013going back […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[1410,9050,9051,9049,1233,353,588,592,1232,6909],"class_list":["post-12267","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-cheap-energy","tag-debt-collapse","tag-energy-growth","tag-expensive-energy","tag-gail-tverberg","tag-gdp","tag-oil","tag-oil-price","tag-our-finite-world","tag-unsustainable-debt"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12267","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12267"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12267\/revisions"}],"predecessor-version":[{"id":12268,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12267\/revisions\/12268"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12267"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12267"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12267"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}