{"id":20385,"date":"2016-05-02T20:53:29","date_gmt":"2016-05-03T01:53:29","guid":{"rendered":"http:\/\/olduvai.ca\/?p=20385"},"modified":"2016-05-02T20:53:29","modified_gmt":"2016-05-03T01:53:29","slug":"debt-the-key-factor-connecting-energy-and-the-economy","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=20385","title":{"rendered":"Debt: The Key Factor Connecting Energy and the Economy"},"content":{"rendered":"

Debt: The Key Factor Connecting Energy and the\u00a0Economy<\/a><\/h3>\n
There are many who believe that the use of energy is critical to the growth of the economy. In fact, I am among these people. The thing that is not as apparent is that\u00a0growth in energy consumption is dependent on the growth of debt<\/strong>. Both energy and debt have characteristics that are close to \u201cmagic,\u201d with respect to the growth of the economy. Economic growth can only take place when growing debt (or a very close substitute, such as company stock) is available to enable the use of energy products.<\/div>\n
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The reason why debt is important is because energy products enable the creation of many kinds of capital goods, and these goods are often bought with debt. Commercial examples would include metal tools, factories, refineries, pipelines, electricity generation plants, electricity transmission lines, schools, hospitals, roads, gold coins, and commercial vehicles. Consumers also benefit because energy products allow the production of houses and apartments, automobiles, busses, and passenger trains. In a sense, the creation of these capital goods is one form of \u201cenergy profit\u201d that is obtained from the consumption of energy.<\/p>\n

The reason debt is needed is because while energy products can indeed produce a large \u201cenergy profit,\u201d this energy profit is spread over many years in the future.\u00a0In order to actually be able to obtain the benefit of this energy profit in a timeframe where the economy can use it, the financial system needs to bring\u00a0forward\u00a0 some or all of the energy profit to an earlier timeframe. It is only when businesses can do this, that they have money to pay workers.<\/strong>\u00a0This time shifting also allows businesses to earn a financial profit themselves. Governments indirectly benefit as well, because they can then tax the higher wages of workers and businesses, so that \u00a0governmental services can be provided, including paved roads and good schools.<\/p>\n

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

Debt: The Key Factor Connecting Energy and the\u00a0Economy There are many who believe that the use of energy is critical to the growth of the economy. In fact, I am among these people. The thing that is not as apparent is that\u00a0growth in energy consumption is dependent on the growth of debt. Both energy and […]<\/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":[162,195,1233,391,5741],"class_list":["post-20385","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-consumption","tag-debt","tag-gail-tverberg","tag-growth","tag-ourfiniteworld"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20385","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=20385"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20385\/revisions"}],"predecessor-version":[{"id":20387,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/20385\/revisions\/20387"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}