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james_nicoll

Richard Duncan, formerly of the World Bank and chief economist at Blackhorse Asset Mgmt., says America's $16 trillion federal debt has escalated into a "death spiral, "as he told CNBC.

And it could result in a depression so severe that he doesn't "think our civilization could survive it."


Why does that sound so familiar? Oh, right: from John D. MacDonald's The Green Ripper (1979)

How did the conference go?" I asked.

He shook a weary head. "These are bad days for an economist, my friend. We have gone past the frontiers of theory. There is nothing left but one ugly fact."

"Which is?"

"There is a debt of perhaps two trillion dollars out there, owed by governments to governments, by governments to banks, and there is not one chance in hell it can ever be paid back. There is not enough productive capacity in the world, plus enough raw material, to provide maintainance of plant plus enough overage to keep up with the mounting interest."

"What happens? It gets written off?"

He looked at me with a pitying expression. "All the major world currencies will collapse. Trade will cease. Without trade, without the mechanical-scientific apparatus running, the planet won't support its [a number] billion people, or even half of that. Agribusiness feeds the world. Hydrocarbon utilization heats and house and clothes the people. There will be fear, hate, anger, death. The new barbarism. There will be plague and poison. And then the new Dark Ages.

[...]

"How much time have we got?"

"If nobody pushes the wrong button or puts a bomb under the wrong castle, I would give us five more years at worst, or twelve at most."

Also posted at Dreamwidth, where there are comment count unavailable comment(s); comment here or there.

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Thirty years and change, and there are still people pushing this? Hoping to make it happen, are they?

But now the numbers are even bigger!

How else can it be insured all those people they don't like are punished for their sins? In this case it's probably not worshipping the Holy of Holies, the Unregulated Free Market, Its Name Be Praised.

It's like putting Dr. Evil in charge of global finance. "Two... TRILLION... Dollars!"

Here is my prediction: when Western civilisation finally collapses, it will be for a more compelling reason than because numbers on a ledger didn't add up in the right way. Numbers on a ledger can be rewritten, if it's really necessary - but economists don't like to admit that, since it means admitting that their field is the study of arbitrary, human-made rules rather than being any sort of hard science.

Now, people warning of environmental disaster, those might be right in the end. But even they have a history of proclaiming that the end is right around the corner only to find that the world wasn't as fragile as they thought.

You're confusing finances with economics. Economics is the study of human interactions on both large and small scales through a certain lens; the rules governing those interactions are of interest to economists as is how they change. Economists don't look at Wiemar and Nazi Germany and throw up their hands in despair -- they say, "Ooo, what a fascinating case study!" What you're claiming is like saying, "Since laws can change, political science is bunk."

(no subject) (Anonymous) Expand

There's a rant written on papyrus in hieroglyphics

That my ancient history teacher read (in English) in class in college.

About the Egyptian government being a broken reed and the younger generation all going to hell in a hand basket. (I no longer remember if it wuz Old or Middle Kingom, but it wuz not New.)

Turns out they wuz kinda sorta right, just off by a couple o' thousand years or so.

And still, or so I hear, the Nile flows north to the sea.

Re: There's a rant written on papyrus in hieroglyphics

I'm Gen X, so I see the older generation all going to hell in a hand basket. I fear what they might do to civilization more than the younger one.

The younger generation are mostly alright, although they seem to think that a singularity ate all media before their birth... they're always saying "that was before I was born", which I've never heard from my generation. After all, I grew up in a time when there wasn't such a deluge of new media and so old media was still largely played to fill time. And so I grew up in a culture that was half before my birth.

I have no memory of that passage, but I remember The Green Ripper as a significant shift in tone for the Travis McGee books (I may be wrong, but it's how I recall). At that point I hadn't read a series which traumatized the lead like that. I had assumed the grimmer narrative of the last few books might be related to MacDonald's age, but now I suspect he read a few theories which brought him down as well.

In the long run, we are all dead.

this is true

(Anonymous)
but it remains that having the distribution of the deadness relatively even is a feature.

-- Graydon

Curiously, there is a large overlap between the people who claim to see the deficit as a Sign of the End of Days and those who call for further tax cuts for the wealthy. It's as if they had some sort of hidden agenda or something. :)

Bruce

Part of the mythology is the idea that the deficit is so large that there's not enough money in the world to get rid of it by taxing anyone. (But cutting spending on welfare will help.)

"There's not enough money in the world" is the major theme, but, curiously, the same people are fans of a strictly limited money supply and terrified that quantitative easing will cause hyperinflation. (The example is always, always Zimbabwe, though sometimes they do stick the Weimar Republic in there so they can claim it created Hitler.)


Edited at 2012-08-23 10:59 am (UTC)

Also, Greece proves that government spending inevitably leads to collapse.

(I like to bug them by claiming that Greece shows that if people pretend they don't have to pay taxes, the society collapses.)

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