If We're Going To Borrow Against The Future, Let's Borrow To Invest

We are at an important juncture as a global society: either we immediately prioritize a new trajectory focused on creating a positive, functional future or -- by continuing the consumptive, extractive, exploitative status quo -- we will default into a nasty nightmare.

What will determine which future path we take is our collective narrative. It's the story we tell ourselves -- who we are, what we value.

The Power Of Narrative

Under the old narrative, the one currently operating and taking us towards disaster, powerful people and interests simply perpetuate a regime of More of the same.

And I do mean ‘More.’  The old narrative rests upon an ideology of endless growth.  It wants and requires more of everything.  More cars sold, more houses built, more jobs created, and more goods and services of every description sold next year than last. 

Everything flows from that want for more. The defenders of the old ideology are therefore defenders of our astonishingly-wide wealth gap, rapid energy depletion, emptying aquifers, disappearing pollinators, ruined soils, and dying oceans.

It doesn’t have to be this way.

A subtext of the old narrative is that humans are destroyers: we wreck natural systems. Put humans somewhere and first the large animals go extinct. Then the waters become polluted. Next, the soils are stripped. 

Less well known, possibly because it shines a bitter light on our common practices, is that humans can be incredible forces of positive change, using their big brains to build natural abundance at rates far faster than nature by itself is able.

Using sustainable agricultural practices, humans can build topsoil at 100x the rate of nature alone.  We can speed up the maturation of forests. Or cleverly plant the right species of vegetation to complement the specific ecosystem needs of our unique local areas to reduce (and reverse even!) the impact and occurrence of desertification. 

All it takes to determine which role we play as a species -- the pillager or the steward -- is the choice we make as a society.

Changing our role is as simple as changing our narrative. And as hard.

So Let’s Do This Right

Imagine for a moment that instead of a trillion dollars being printed and handed to the big banks, that same trillion dollars was spread across a range of investments in our collective futures.

This idea crystalized for me during a recent interview with Richard Duncan wherein he noted that we have had a once-in-a-lifetime (maybe once ever) opportunity to borrow a lot of money at the national level, even to print up enormous amounts of money, without creating meaningful inflation. 

A very rare combination of factors allow this to occur at this moment in history, including excess global manufacturing capacity, global labor markets and increased automation (which prevent wage inflation from taking root), and very low inflation coupled to the lowest borrowing costs in history.

Put all of that together and the OECD countries (US, Japan and Europe, mainly) have a very rare opportunity to borrow, and borrow a LOT, on extremely favorable terms.

In our conversation, he asked, Why wouldn’t we do this, and then spend that money on our highest-potential opportunities?  Not consumption, mind you, like transfer payments and wars and other non-value-creating behaviors, but investments.

Bailed-Out Banks, Or Better Batteries?

For example, we desperately need electricity storage technology to improve. If we’re going to ever transition to renewable, non-fossil energy sources like wind and solar, then we absolutely have to have improved battery storage.

So let’s dedicate $100 billion of that trillion to improving battery technology. Set massive monetary prizes for whomever solves the power density riddle using common materials. Fund research laboratories lavishly. Use PR to elevate and revere the scientists and engineers who make promising breakthroughs, in order to lure our best and brightest minds into this important field.

Spend another $300 billion installing solar thermal panels on every roof top where it makes sense.  Retrofit old buildings and require new ones to install them as part of the building process.  Whether existing hot water heaters use electricity (coal, gas) or oil and gas directly, fossil fuels are being burned to heat water, which is just plain stupid. The sun can heat water for our needs just fine, for free (after a small investment).

Then spend $500 billion upgrading our electricity grid to get it ready for the next hundred years. Make it smart and distributed, and therefore less vulnerable to natural disasters or intentional acts of sabotage.  Get it ready to accept and use the diverse sources that alternative energy will require, so we can let competitive innovation flourish.  Use technology paired with incentive alignments to drive more efficient use of electricity by consumers. Cars with improved batteries will both draw from and put back into the local grids: when the sun shines and the wind blows, electricity will be flowing into the grid; on calm days and dark nights power will be drawn from all our collective storage devices.

Take the last $100 billion from our trillion and put it into permaculture and cutting-edge sustainable farming practices that demonstrably improve our soils and support diverse life while removing the needs for fossil inputs in food production. Models like Farmland LP prove that such farming practices not only work economically, but ecologically.  Everybody wins, humans included. Fund regenerative farming programs, give awards, and let the bright young people working in these fields know that society supports and admires their success and mistakes alike.

The Choice

So that's an alternative way to spend $1 trillion, instead of giving it to the banks as central planners around the world have been doing hand over fist. For perspective, since the 2008 crisis, the world's major central banks have injected over $8 trillion into the financial system by expanding their balance sheets. Given the moribund global economy that's resulted, along with the massive wealth gap and increased systemic instability, perhaps we'd indeed have much more to show for their efforts had a mere $1 trillion been invested in the way just proposed.

The point is, if we're going to use this historic "hall pass" to borrow massive amounts of money, shouldn't we invest that money towards creating a future worth inheriting?

(Yes, there are very good arguments to be made we perhaps shouldn't be feeding the debt glut that's at the root of our global economic problems. But the borrowing and money printing is indeed happening. So as long as it is, shouldn't we be doing wiser things with it than simply enriching the top 1% at the expense of everyone else?)

When the next trillion is borrowed into existence, let's do inspiring and wonderful things with it. Spend money to buy out fishermen so that collapsing ocean fish stocks can recover. Invest in water conservation and recovery projects where needed.  Rebuild our crumbling bridges and deliver the highest speed internet, for free, to every corner of the country.

To do all of this, all we need to do is decide that these are our priorities instead of the sorts of things we currently spend our money on.

The alternative, sadly, is simply more of the same. That path is leading us straight into a nested set of predicaments that will all come crashing down on our collective heads at some point in the future.

So that’s the change in narrative. If we're going to borrow, let's borrow to invest in ourselves and in our future.  Any country that does this will quickly become a shining example that other countries will want to follow, and from whom they will buy the next round of cutting-edge technologies that will actually improve people’s lives and rehabilitate their hopes. And give us the infrastructure we'll need to navigate the twin colliding trends of resource depletion and population growth.

Sadly, the people and institutions in power do not cling to the status quo lightly. Do I expect them to support a radical shift in narrative that leads to very different behavior than we see today? No. No I don't.  But it's worth a shot.

In Part II: What Systemic Breakdown Will Look Like we’ll discuss what will happen if we don’t do things differently by looking at the probable breakdowns in the economy, energy and the environment, as well as how you should prepare for these outcomes. 

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

This is a companion discussion topic for the original entry at https://peakprosperity.com/if-were-going-to-borrow-against-the-future-lets-borrow-to-invest/

Chris, this essay make so much sense it almost makes me want to cry.  I'm a fiscal conservative/less government kind of guy but I could easily get on board with such a plan, particularly when comparing it to the absolute WASTE of trillions that we've seen recently.
My question to everyone here is why is Chris Martenson the only guy saying this?  Where is our so-called leadership?  Unless I missed it I have not seen any one in the Administration, Senate, or Congress putting forth such a practical and sensible idea.  Why not?

T.

Absolutely spot on. Investing in infrastructure by way of repair and future proofing is the answer. Seems obvious, even a US senator could understand it.
We would have this already if we had a real democracy but policy is dictated by the lobbyists and then sold to the simpleton masses using the commercial propaganda machines we call free-speech media.
The biggest obstacle to common sense right now is culture. Everything is upside down. Democracy doesn’t work because the uneducated majority only votes a point of view manufactured for them by the best funded political TV campaign. The elite therefore have the say and are desperate to keep it that way and have become increasingly good at doing so.
Sadly, the reeducation of the current culture of ignorance, largesse, squandering and free lunches just wont happen without revolution, war or famine. Something painful in any case. While I agree with the article 100% the ideas can only ever be hypothetical because they are a way of thinking that has been lost by the entrenched establishment in power everywhere today.

Congress isn't saying this kind of stuff, and the Administration is finally starting to discuss related subjects, but others have been talking about these things for a long time.  They're called environmentalists.  Right wing world calls them communists.  And some in the Senate still call climate change a hoax.  It's a continuum for the last 50 years or so.
It all points to the extreme success of those who keep us in the dark because they make massive money off of our ignorance.

Trun87114,
You asked why no one but Chris is putting forth this sort of idea, and other than the trite response of a general myopic lack of imagination and short term thinking from our so-called leaders, I would say that it simply threatens too much of the current dysfunctional system.

  1. Each of the very sensible suggestions threatens a very large and entrenched industry/lobby. Decentralized solar is the worst nightmare for the very centralized fossil fuel/power industry. Is it the best thing for the country? Yes! It is excellent on so many sensible levels that it is hard to imagine that we wouldn't do something like this until you consider how our bought and paid for political system works.

  2. Permaculture is another awesome idea which makes sense to everyone but Monsanto and the large scale agricultural producers who don't want what is most sensible. They want what is most profitable - to them.

  3. Even infrastructure - something like high speed rail lines makes tons of sense but there is a whole road building lobby that will oppose it tooth and nail.

  4. Doing any of these things would require actually acknowledging that we have 'problems' that need addressing. This goes against everything in the smoke and mirrors economic 'recovery' that is always going to arrive if we just print another few trillion dollars. Instead of leading or doing anything responsible (like paying for wars as you go…) our current political system relies on the ancient Roman tradition of bread and circuses to distract the masses while the whole country is pillaged.

What we lack in this country (US) is any sort of vision or leadership. If there were a time to do something like this it is now, both due to the real world predicament that we are in and the political situation. Obama is a lame duck president who will never get elected again. Why doesn't he use some of those 'Executive Orders' to implement something useful like this instead of fomenting lunacy by telling us Venezuala is an imminent threat to the security of the country?

Incidentally, one voice that has been continually calling for a the equivalent of a WWII mobilization of global economies to implement sensible strategies like those Chris has listed is Lester Brown (http://www.earth-policy.org/). He hasn't had the print and invest twist that Chris put forth but all of the sensible ideas are there waiting to be used.

Mark

What would it take to get this article printed to the front page of the New York Times?  Anyone in the community know someone who could make that happen?

Democracy - your Banking Class thanks you for believing

Trun… exactly…always a point that's stuck with me  
 

But, as it would probably mean their job or position, I can see the reluctance of our "elected" representatives to maintain the status quo.

 

My question is, where are all those academics, the highly educated churned out year after year.  PEs, JPs, phds, mbas (excepting ivy league wall street vulture chicks)… scientists, engineers, lawyers, doctors…they all with futures and families in harms way.  Why aren't they raising a ruckus.

 

If our brightest are dumbed down dimwits, whom do us reg'lar folks have to look to?

Because they are slaves.  They live in a world that has been pulled over there eyes to blind them from the truth.  Like everyone else, they were born into bondage, born inside a prison that the cannot smell, taste or touch.  A prison for their minds. 

https://www.youtube.com/watch?v=4cpfSPPwUHo&feature=player_embedded

 

Hey Chris,
Just wanted to let you know how much this piece was appreciated.  You had passion and attention to detail in this one that is reflected in many chapters of the Crash Course.  I don't know how long it took you to pen the words above, but I feel it necessary to let you know they were very effective.  They inspire, they lead, they map out solutions to your faithful.  Words and ideas matter and your vision came across loud and clear.  I will spend much time reflecting on what you have written above.

Jason

Chris, your message is so clean, so logical, so sensible and right.  It shines with what Stephen Colbert used to call "truthiness".  I'm filled with sadness though, because now I see that there is a path out of the nightmare hole that humans have dug, and that we could take it right now, with what we already have, and it would save all of life, not just people - but we won't.  

I'm filled with sadness though, because now I see that there is a path out of the nightmare hole that humans have dug, and that we could take it right now, with what we already have, and it would save all of life, not just people - but we won't. 
I share your frustration and sorrow Zoedog, there is not one chance in a million that we'll take this path - for reasons astutely outlined by Mark in post #4 and most specifically because rich and powerful people would feel their interests to be threatened. This type of thinking will never be permitted to enter mainstream conversation.

Whilst my daily focus is almost always positive I can't help but be bleakly pessimistic about the future of the ecosphere and the human species. As I may have mentioned before we humans should not be known as homo sapiens but as ovis callidus (clever sheep).

Please be aware of magnetic refridgeration.  It makes better use of your available energy than gas refrigeration. 
http://www.cooltech-applications.com/magnetic-refrigeration-system.html

http://en.m.wikipedia.org/wiki/Magnetic_refrigeration#The_magnetocaloric_effect

http://www.gizmag.com/ge-magnetocaloric-refrigerator/30835/

 

The sentiment is good, but one underlying assumption makes it unworkable: that government should be involved.
Just look at Solyndra vs. Solar City. Government efforts will always have improper incentives and so will choose the wrong solutions. On the other hand people like Musk are already improving the infrastructure without (much) government help or involvement.

Government took a sound and sustainable money (silver coins) and turned that into the unsound and unsustainable (in its effects) Federal Reserve Notes. They claim they did it for the right intentions, but their incentives are messed up so they cannot help but get it wrong.

If the people en masse, as individuals, decided to follow the good advice to only borrow for investments in the future, that would go a long way towards fixing things. I'm on that path now, living on a permaculture farm while working hard to eliminate all my debts (which had piled up before my eyes had become fully open). So yeah, the narrative is good with the proviso that it can and should start at the level of the individual.

I am reminded of how an alchoholic will not change behavior until there has been admission and recognition of the problem. It seems that the destructive policies of our government will not change with out a similar admission and that is not likely with out massive pain and suffering.

Make no doubt we will eventually get to the center of the lollipop. The only questions left is how many licks will it take. Take too many and the center spoils, bite and you make a faster path to the sweet rewards. I suggest steering the actions of your life, the things you do control, to be biting ones. Speak the truth loudly and boldly. Take risk and experiment, especially ones of radical love and acceptance. Do not seek comfort, seek personal growth. Help others so that you can receive help. Be a rock, so when its required to be soft the transition is seemless. Support others along the same path, teach and be taught. And don't forget to weave it all thru playfulness, for its infectious qualities. 
Here is some musical medicine. Nahko styled

https://www.youtube.com/watch?v=PtE10YN1kDU

Chris
All of the changes you list, as  so many of those who  have responded to the article have said, require first the death of an entrenched industry/economic interest.  The natural world is able to respond quickly when a large species at the top of the feeding chain dies because smaller more resilient species are waiting in the wings.  So, we must wait, not only patiently, but persistently, surviving in the shadows of the great beasts, in the back waters of the streams until the inevitable death of the behemoths.  

These ideas and the actions they spawn are very powerful, but require the right environment to flourish.  Here is where the magnets come in.  Like bumper stickers–attached to the back side of an oil burning behemoth, or magnets attached to the door of an electrically dependent refrigerator, we should be disseminators of these ideas through everyday contacts, even though we are also dependent on the system to function. 

Some can afford to break free to some degree from dependence on the system…go for it!  Others of us find ourselves surviving on the edge in an environment that limits our potential to implement changes.  In both cases our persistent speaking out with the ideas for a better future is an important function that implants the genetic code of a survivable tomorrow. 

So, for a literal interpretation of these ramblings, I would love to see some sound bite size comments that would  make good bumper stickers and  refrigerator magnets. There is a business opportunity here.

 

It's The Three E's Stupid!
That should start a few google searches.

That's a good point actually.  Any consideration of a Bumper Sticker(s) with a catchy message, maybe the PP tree and www.peakprosperity.com along the bottom?

So, I'm to replace united states government and current central bank planning with your "central planning" that spends billions money on batteries, electrical grid and farming and we're all going to be better off and, by golly, your central planning beats their central planning because, um, you're the "good guys" who care?
seriously?

Hayek was correct that there is conceit. but he missed human blindness and the stubborn incapability to introspect.

where, in the grand scheme of things, are you different?