As  posted on the PBS NewsHour YouTube Channel on 5/23/14

PBS NewsHour economics correspondent Paul Solman speaks with former pharmaceutical executive Chris Martenson, who now lives in rural Massachusetts, about exponential growth and the danger of rising debt.

“We have an economy that’s based on growth.  We want it to grow all the time.  Not a lot . . . 3% real, maybe 5% nominal growth.  We’d like jobs to grow . . . we’d like to see more auto sales next year . . . more houses sold . . . and it’s always on a percentage basis.  Whenever anything is growing by some percent amount over a unit of time, it takes a characteristic curve shape.  It’s not a straight line.  It takes off so-to-say, and that’s really powerful.  If we said we wanted our town to grow by 5% per year, in 14 years, that mean twice as many people will be living in that town.  So if our economy is growing by just 3% per year, we’re going to be doubling it every 24 years.  How many more times can the world be twice as big?

Consider for example, half of all the copper that’s ever been mined has been pulled out in just the last 30 years, whereas we’ve been mining copper for 5,000 years.  It’s amazing to think about how much our economy requires that to continue forever.

Now consider that the current monetary system works exactly the same way.  Every dollar (and every other currency) is loaned into existence.    What do we know about loans?  There’s a principal and an interest component.  That means we have a compounding exponential money system.  The money to pay the interest does not exist until it too is loaned into existence.  As such, the money supply must continue to grow . . . exponentially . . . or the whole system will fail.”

How many more times can the world be twice as big?

Chris Martenson, is a former American biochemical scientist and Vice President of Science Applications International Corporation.  Currently he is an author and trend forecaster interested in macro trends regarding the economy, energy composition and the environment at his site, www.peakprosperity.com.