Continuous geometric growth in a finite biosphere is
impossible

There is nothing quite as seductive as extrapolation. I
remember when I was in junior high study hall, we budding gearheads would sit
around making "calculations" such as "if you can get a car to go
80 Kph with 150 horsepower, you should be able to go 320 Kph with 600 horsepower."
And while this childish foolishness was wrong for dozens of sound reason, it
was certainly no worse than the typical budget, growth, or profit calculations
one finds in daily newspapers or teevee newscasts.

**Geometric extrapolation**is even worse. It is probably the most commonly practiced form of utter insanity. For how long have we known this is crazy? The Sumerians taught us about the S-curve at least 4000 years ago. The S-curve is based on the historical experience of producing things--whether corn or iPhones.**Michael Hudson on the humans who knew better**

Hudson says that – in every country and throughout history – debt
always grows exponentially, while the economy always grows as an S-curve.

Moreover, Hudson says that the ancient Sumerians and Babylonians
knew that debts had to be periodically forgiven,

**because the amount of debts will always surpass the size of the real economy**.
For example, Hudson noted in 2004:

Mesopotamian economic thought c. 2000 BC rested on a more
realistic mathematical foundation than does today’s orthodoxy. At least the
Babylonians appear to have recognized that over time the debt overhead became
more and more intrusive as it tended to exceed the ability to pay, culminating
in a concentration of property ownership in the hands of creditors.

Babylonians recognized that while debts grew exponentially, the
rest of the economy (

**what today is called the “real” economy**) grows less rapidly. Today’s economists have not come to terms with this problem with such clarity. Instead of a conceptual view that calls for a strong ruler or state to maintain equity and to restore economic balance when it is disturbed, today’s general equilibrium models reflect the play of supply and demand in debt-free economies that do not tend to polarize or to generate other structural problems.
And Hudson wrote last year:

Every economist who has looked at the mathematics of compound
interest has pointed out that in the end, debts cannot be paid. Every rate of
interest can be viewed in terms of the time that it takes for a debt to double.
At 5%, a debt doubles in 14½ years; at 7 percent, in 10 years; at 10 percent,
in 7 years. As early as 2000 BC in Babylonia, scribal accountants were trained
to calculate how loans principal doubled in five years at the then-current
equivalent of 20% annually (1/60th per month for 60 months). “How long does it
take a debt to multiply 64 times?” a student exercise asked. The answer is, 30
years – 6 doubling times.

No economy ever has been able to keep on doubling on a steady
basis.

**Debts grow by purely mathematical principles, but “real” economies taper off in S-curves.**This too was known in Babylonia, whose economic models calculated the growth of herds, which normally taper off. A major reason why national economic growth slows in today’s economies is that more and more income must be paid to carry the debt burden that mounts up. By leaving less revenue available for direct investment in capital formation and to fuel rising living standards, interest payments end up plunging economies into recession. For the past century or so, it usually has taken 18 years for the typical real estate cycle to run its course.
As I have previously pointed out, our modern fractional reserve
banking system is really a debt-creation system, which is guaranteed to create
more and more debts. The modern banking system is therefore exacerbating the
debt growth problem which countries have suffered for thousands of years.

Hudson calls for a debt jubilee, and points out that periodic debt
jubilees were a normal part of the Sumerian, Babylonian and ancient Jewish
cultures. Economist Steve Keen and economic writer Ambrose Evans-Pritchard also
call for a debt jubilee.

If a debt jubilee is not voluntarily granted, people may very well
repudiate their debts.

It is important to understand the reasons why

At this link, you can find 23 different charts showing historic geometric growth of human activity--which is why all of them are destined to crash in the very near future.

**geometric extrapolation**is ultimately impossible because those assumptions are built into almost every newscast, financial arrangement, political planning, etc. It would be a rare days anymore when the subject is implicitly brought up at least ten times.At this link, you can find 23 different charts showing historic geometric growth of human activity--which is why all of them are destined to crash in the very near future.

The human economic growth story is incredible. Population
increased exponentially, as did global wealth, factory output and other
measures of development.

But the flip side is the steady exhaustion of resources and
destruction of the environment. As growth continues, planetary tensions will
increase too.

**This is why we're running into peak everything.**
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