Addicted to Growth

Scott Erickson's a terrific writer and environmentalist who cuts to the chase when it comes to explaining why growth is no longer sustainable using the clever alias of a 14 year old girl named Amy, who explains, in wonderfully clear language, where growth comes from and why it has to stop. 

Let’s say you get a loan for $100, but because of the interest you pay back $110. Here’s an interesting question: Where did that extra $10 come from? 

It didn’t come from you, since you can’t create money. Only banks can – by making loans. So the extra money could only come from one place: More loans! If you trace money to where money comes from, it almost always comes from a loan. 

People can get personal loans, but what’s more important for the economy is business loans – loans to start or expand a business. Of course all the loans have interest, which means paying back more money. But we’ve already figured out that money is “created” by banks issuing loans. So to pay off past loans, somewhere else in the economy there has to be new loans which create more money. But then THOSE loans have to be paid off with money, which means MORE loans. 

It always comes back to the banks making more loans to pay off the existing loans. This has been going on for hundreds of years, which is how the economy “grows.” 

Economic growth needs more money, but more money needs more economic growth, which needs more money. And it doesn’t stop. It can’t stop. 

That’s not only how the economy grows, but why it HAS to grow. We can never get to a point where growth is “enough.”

This is why we’re addicted to economic growth. We’re not creating money; we’re creating debt! Like with any addiction, we keep doing it even when it’s not working any more. 

Read the rest of this wonderful excerpt from the book, you won't be disappointed. :)

I like his splash image as well.