02 October 2008

Indebtedness, Oil Dependence and the Resultant Crisis

Some quotes relevant to the current crisis:
The White House just asked the national debt ceiling be raised another $700 billion, for the proposed financial-sector bailout. If that happens, in 2008 alone, $1.5 trillion will have been added to the national debt: every penny borrowed from your children and their children. Stated in today's dollars, in 1979 the entire national debt was $1.5 trillion. George W. Bush and Congress have in a single year added an amount equal to the entire national debt one generation ago. And the year's not over!
"...deficits don't matter." - Dick Cheney
...the housing industry in the Midwest and the Northeast routinely floods local markets with new, ever-larger houses. ...more than 27,500 houses were constructed between 2000 and 2004, even though the population grew by only 3,000. In the process, older houses and many older neighborhoods … have become as disposable as used cars.

...We have obdurately resisted the reality of the energy crisis that hangs over everything we do (as slavery hung over the 1850s), from the way we inhabit the landscape to the way we do daily business in our 240-million-plus fleet of cars and trucks that ply the ribbons of asphalt and the lagoons of parking that now run from sea to shining sea where the fruited plain was replaced by the Wal Marts.

Mr. Obama isn't kidding either when he alludes to the change America faces, though history has not yet rhymed enough for his rhetoric to really set forth the terms of this change in its stark particulars. And even if he is able to articulate these things, he won't forestall the convulsion anymore than Lincoln held back a war between the states. That prior crisis was when America learned good and hard how tragic life could be, and it colored our national character for a century -- until we chucked it all to become a society of overfed clowns, with God Almighty replaced by Ronald McDonald. That pageant of happy idiocy is now ending. Like everyone else in this fraught and nervous land, I'm standing by to see what transpires in the days just ahead.
That said, there really IS a new economy. We may characterize it as we will, but what it clearly is NOT, is a manufacturing economy. The "old" economy (Made In America) has long since disappeared, and will never return to these shores. In its place we have the Post-Industrial Economy. We don't make anything anymore; we flip burgers. We don't even earn enough to buy what we import; we have to borrow ... $2 billion per day ... from foreigners!-Jim Kunstler

The long term crisis is about energy. And it a crisis only because we are such oil hogs. We spend hundreds of thousands of BTUs just to drive to the grocery. We have stick-framed houses with vaulted ceilings that take thousands of cubic feet of Methane to heat. We use petroleum based fertilizers to grow more corn on fewer acres. We cover the old farmland with strip centers and petroleum asphalt. Corn is oil. We are oil. Everything about who we are, what we eat, what wars we fight, how much our house is worth ...is about oil.

Expert predicts oil may hit $500 per barrel...
In fact, a lot of how we did things in the pre-oil era makes good sense for a post-carbon 21st century. Without cars to skew our sense of distance and place, we developed cities, provisioning systems and even cultural and social norms suitable to a lower-energy world. That doesn't mean we need to revert to some 19th century or anti-technology lifestyle. We simply need to rediscover those ways of running a society and an economy that don't completely depend on petroleum-powered engines. - Sacremento Bee


Jason said...

Excellent post!
This country's dependence on oil absolutely sickens me. I'm doing everything I can to change my own personal dependence on oil (I ride my bike to work and to as many places as I possibly can and avoid driving like the plague)
The massive amount of debt that most americans go into is another thing that really bothers me and I'm working on fixing that in my own personal life too, but that's going to take me awhile with all the student loans I have.
I agree that change is certainly going to come whether we like it or not. The next few years are going to be VERY interesting in my opinion, not only for the country as a whole, but for our city and its downtown especially.

CityKin said...

I've come to the peak oil argument late. Some people have been saying this was a problem years ago, but I had a hard time believing it. Lately I've coem to the realization that it isn't scarcity, rather the problem is the increasing difficulty and expense of finding and extracting what remains.

And like you I have struggled with debt.. that is a whole 'nother blog post.

Anonymous said...

Another great post.

One note on Kunstler, I think he's a fantastic advocate for urban living, walkable neighborhoods, mixed use, etc....

But he is less than reputable when it comes to predicting the future of the US economy and energy dependency. In fact he's definitely an alarmist, and the recent spike in gas prices seems to have emboldened him even more.

Anonymous said...

Rek makes a good point about Kunsler. He's clearly an alarmist but there is a nugget of truth in what he says.

If you read some of this later works its hard to believe his view of the future will come true. However if he's even 20% right we still are in for a very hard time!