The Crash Course - Chris Martenson [113]
Then we learned that the most profound financial shortfalls of the U.S. government rest with the liabilities associated with the entitlement programs that are underfunded by somewhere between $50 trillion and $200 trillion dollars, neither of which are payable under the most optimistic of assumptions. A number of other governments around the globe are suffering similar shortfalls and constraints.
Throughout the last several decades, the economic numbers that we reported to ourselves were systematically debased until they no longer reflected reality. They were (and continue to be) fuzzy numbers. Bad data leads to bad decisions, and this is another reason why we find ourselves in our current predicament. The longer we continue to fib to ourselves, the worse the eventual outcome is likely to be.
Energy
Next we learned that energy is the source of all economic activity—it’s the master resource—and that oil is a critically important source of energy. Our entire economic model rests upon continuous growth and expansion. This means that it’s built around the flawed assumption that unlimited growth in energy supplies is possible, which, unfortunately, is an easily refuted proposition. Individual oil fields peak, as do collections of them. Peak Oil isn’t a theory; it’s simply an observation about how oil fields age.
We explored the tension that is obviously present between a monetary system that must grow and an energy system that can’t grow. All complex systems, of which the economy is a textbook example, owe their order and complexity to the energy that flows through them. Remove the energy, and by definition (and universal law), order and complexity will be reduced. Starving our economy of fuel risks crashing it.
The amount of fossil energy that we have at our disposal is fixed. Like a trust fund that earns no interest, it can only get spent once, and then it’s gone. Technology can help us to utilize that energy more efficiently, but it cannot create new energy.
The Environment
Finally, we noted that the environment, meaning the world’s resources and natural systems upon which we depend, is exhibiting clear signs that we’re approaching its limits. We’re finding ourselves in the position of needing to exploit the poorest-quality mineral ores, peaks in critical resources are being noted at a faster and faster pace, and we’re scouring the globe for the last few concentrated sources of primary wealth. We’re also depleting water in fossil aquifers at unsustainable rates, farmers are mining soils of essential nutrients, and our oceans’ rich ecosystems are suffering.
“Unsustainable”
Putting it all together, we come up with a story that’s very simple and virtually airtight: Our present course is unsustainable. Perhaps we can console ourselves with the idea that somehow we won’t reach the limits of our resources during our individual lifetimes, but we cannot argue that finite energy resources can last forever. If something is unsustainable, it will someday stop.
Many theoretical thinkers—including economists—reject the idea of limits, but individuals armed with the proper facts almost never do. The landmark modeling work done for Limits to Growth in the early 1970s was spot-on in virtually every respect, but economists and the media trounced on it because it did not fit their preferred view of a world without limits.2 To economists at the time (whose ideas unfortunately still hold sway), resources just show up on time and as needed in response to “market demand,” and any intrusions on this tidy arrangement are often rejected out of hand.
If we had taken the time to heed the lessons in Limits to Growth, we would be in far better shape today, but