Richard Heinberg is Senior Fellow-in-Residence at Post Carbon Institute and the author of 10 books, including The End of Growth: Adapting to Our New Economic Reality. In this guest post, taken from the Post Carbon Institute blog July 26th, he explains the recent debt ceiling crisis in a broader context, one of drastically altered economic structures - not recovery or recession but The End of Growth as we know it.
"President Obama and House Speaker Boehner are both right, but they're both tragically wrong. And unless they can somehow wake up and see why they're wrong, we all lose-big time.
Let me explain. But to do so will require setting three levels of context.
The immediate context is of course the fact that Republicans have created a political crisis by refusing to raise the nation's debt ceiling unless they achieve their priorities of dramatically reducing government spending-primarily on social programs.
A larger context is the fact that the U.S. is still reeling from an epic credit crunch. During the past decade, home prices were bid up to unrealistic levels and the financial industry magically and dramatically expanded the resulting bubble with the helium of securitization and derivatives. When the bubble popped, government bailouts and stimulus packages were deployed to prevent bank failures and help stanch the exploding levels of unemployment.
The even bigger, and most important, context is that we are entering a new historic era. Oil prices are high due to the ongoing depletion of giant, easy-to-produce oilfields discovered back in the 1950s and '60s, and the substitution of expensive oil from deepwater drilling and tar sands. Other non-renewable resources are also becoming scarcer. On top of that, the climate is changing and weird weather is helping drive up food prices. Oh, and let's not forget, the oceans are dying. Altogether, it seems reasonable to conclude that economic growth-fueled during past decades by cheap energy and raw materials, but also made possible by a stable climate-is coming to an end.