Parable for the new decade

J.D. Alt

Paying for what needs to be done to save our planet from disaster

With the recent essential collapse of the U.N. Framework Convention on Climate Change in Madrid (see article “Climate meeting goals go unmet”, Washington Post, 16 Dec 2019) we now approach the beginning of 2020 with much less to celebrate, much more to fear, and much more to accomplish. Here is a little parable for the coming New Decade: “ One evening on a recent day, several observatories in the International Asteroid Warning Network are startled to discover a cluster of incoming asteroids of massive dimensions. Over the next several weeks, other observatories corroborate the finding. Painstaking digital analysis reveals a 97% probability of a collision with planet Earth on December 24, 2030 – around ten years in the future. Calculations and engineering projections, coordinated by the Ministers of Space (MOS), suggest the asteroid cluster – named (of course) “Armageddon” – can be broken up and diverted with a coordinated deployment and firing of 3,000 nuclear armed laser- cannons. The cost for engineering, producing, testing and deploying each nuclear cannon is projected at about $6 billion – generating a total cost of $18 trillion.

“ In other words, to divert the asteroids and therefore save our planet, a very large, focused, and coordinated group of people and businesses will need to be paid a very large sum of money to undertake and accomplish the specific tasks necessary. Assuming we want to survive, the next calculation is: Are the resources necessary to build and to deploy the nuclear cannons available on planet Earth? Obviously, if those resources – labour, technical knowledge and skills, exotic materials and rocket-fuel, etc.- don’t exist, the question is moot and we’re left to live out our fate, counting off Christmases until the very last one. To everyone’s immense relief, the Ministers of Resource (MOR) are able to determine

the necessary labour, technology, and materiel and find that it is all available to produce and deploy 3000 nuclear laser cannons. If expedited to the hilt, the work can be accomp-lished in seven years – providing three years to spare before the projected collision. This, of course, creates major headlines and celebration! “THE WORLD CAN BE SAVED!”

“ The only question remaining is: Where will the $18 trillion come from to acquire the materiel and meet the laser cannon engineering, production, testing and deployment payroll? The Ministers of Finance (MOF) are consulted. MOF immediately says there’s a problem. The difficulty, they say, is that there will be no financial return on the $18 trillion investment: no one will buy the laser cannons once they’re produced – so investors could not recoup their capital, let alone make a profit. Nor will anyone rent the laser cannons once they’re in place. There’s no secondary market for the cannons because, of necessity, they’ll be destroyed by the explosive interaction with the asteroids. Building and deploying the laser cannons, in other words, is not only financially unprofitable, it is a total loss. Therefore, MOF explains, the profit-seeking financing mechanisms of private enterprise – which could otherwise create the $18 trillion in a heartbeat – will not be able to participate!

“ The remaining options to acquire the $18 trillion, MOF further explains, are basically three: First, a new tax could be imposed on citizens and businesses, essentially claiming $18 trillion of their future income and profits for the cause of saving the planet. And second, the philanthropical organizations of the world could step up and donate large chunks of their fortunes – comprising after-tax profits already accumulated – to the cause. Third, sovereign govern- ment could borrow the $18 trillion from the existing capital (savings) of private enterprise. If there isn’t enough avail- able capital to be borrowed, the private enterprise would be happy to create more, so long as it is guaranteed the loans will be repaid with interest.

“ More headlines like: ‘PROPOSED NEW TAX REDUCES INCOMES BY HALF!’ ‘CHARITABLE FOUNDATIONS DON’T HAVE ENOUGH DOLLARS!’ ‘DOUBLING NATIONAL DEBT WILL BANKRUPT OUR GRANDCHILDREN!’

“ Now people are starting to feel very anxious. A year has been lost in the calculations and debates about the $18 trillion – and work on the nuclear laser cannons has not even begun! Some are beginning to question whether the asteroids really exist, or whether there’s been an error in the calculations – or even whether the scientists are being paid-off by the laser cannon industry! At the same time, there’s only two spare years, now, to get the nuclear cannons built and deployed.

What can we do? Are we willing to cut our incomes in half? Are we really going to enslave our grandchildren to such a debilitating debt? Maybe we should redo the calculations. Maybe we should build a bigger telescope for a closer look at the asteroid cluster.

Maybe there’s another asteroid coming along that will collide with the cluster before it collides with Earth. Maybe we need to elect some new Ministers to make these decisions. And now, before we know it, another year has been lost as the debate continues….”

If we replace the asteroid cluster of our parable with the oncoming threat of global climate change, we have a useful operating description of our real-world dilemma today: It’s all about the money. It’s not about whether the labour, technology and know-how exist to extract and sequester one trillion tons of carbon from the atmosphere – and transition to a zero-carbon economy in the process. It’s all about where the money will come from to pay for that labour, technology, and know-how — and who’s money it will be, and whether we’ll collapse in debt and inflationary chaos as a result of the spending.

This is why the objective of explaining functional finance is our biggest hope for the coming decade. Best wishes for the New Decade.

Source: New Economic Perspectives, 17 Dec 2019 http://neweconomicperspectives.org/2019/12/parable-for-the-new-decade.html

Comments:

1. Howard Switzer

   The problem is obviously debt, no one wants debt except the creditors who profit from it and economists who drank the cool-aide.

   Why should nations be forced into debt when they can create their own money as a perm- anently circulating asset? It is because elites control the issuance of money for profit which is usury and they do so to maximize their take always.

   If you are concerned about human behaviour you should look at how usury negatively affects human behaviour The current elite controlled usury-money system maintains the ‘scarcity mentality;’ an underlying belief in competition as the means of survival, which is linked with fear which, in turn, creates more scarcity all the while that wealth is extracted and systematically concentrated to the hands of a few. We need to get our act together and quit giving elites a pass to protect the status quo.

2. Brian Vree

   The reason action does not happen in regard to climate change is that the average person doesn’t really believe it’ll be that big of a deal. Yes, yes, you might convince them that it is happening. And you might even convince

   them that the results might be negative…but how negative? If you paint a story where it is earth-shattering, they won’t agree.

   They just can’t imagine it. But if you paint it as an inconvenience, then it isn’t a big enough issue to do much anything about. The average person doesn’t care about government budgets & finances. That’s not why we fail to have traction on this issue. It is just a matter that people don’t believe the problem is that big of a problem.

3. J.D. Alt

   Brian, at one level your point is well taken. It certainly does NOT apply, however, to the delegations of people attending – and the millions of people paying attention to – the Paris Accords and their follow-up Frame- work Conventions on Climate Change, as well as those debating and analysing the findings and recommendations of the U.N. International Panel on Climate Change.

   These are the people who are TRYING to take action – and they are stymied by a misinformed “money” narrative. Nor are they depending on a majority of “average persons” to be genuinely alarmed by climate change in order to legitimize the actions they’re trying to implement.

   The perspective you’re suggesting, in fact, underlies part of the monetary misunder- standing itself – namely that the “average persons” will have to agree to be taxed up to their necks, and beyond, in order to pay for what needs to be done. They don’t.

4. Yok

Brian, the error of your thinking is in putting the locus of direction and control in the hands of the average person. In my judgement he has very little power and control. Most everything is decided for us. We are allowed to choose from among options selected for us. We don’t have referendums at all. I’ve read where 80 percent of the population have wanted a higher minimum wage for the last 20 years. Well, we haven’t got it. We live in a social system in which decisions are made for us, by people who are chosen by the people with the greatest causation. Don’t lay it on the least in our society. Lay it at the feet of the wealthy and the powerful.