We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese …
We can’t do this anymore.
Thomas L. Friedman, New York Times
Something always seemed fishy about that system to me, too. All, or almost all, of this "stuff" eventually ends up in the landfill, where its of no further use to anybody ever again. Taken to the extreme, this system eventually results in a situation not unlike the gray goo scenario: all matter on Earth has been converted into discarded consumer goods. The only difference is that the consumer goods aren’t being manufactured by poorly programmed nanobots (yet). Instead, the culprit is an economic system operating under a set of flawed rules, which could be thought of as its programming.
So we have a system trading money for stuff that ends up buried. This wouldn’t be quite as bothersome if the burying of the stuff somehow resulted in money returning to the system. It doesn’t, of course. This is a situation where tame gray goo would come in handy! All that discarded stuff could be turned back into raw materials for the next round of manufacturing… which would result in money returning to the system. Sadly, that technology doesn’t quite exist yet.
As for the issue of Chinese buying US T-bills, it seems to me that’s the equivalent of falling into a payday advance trap. It’s covering a shortfall at one point by borrowing from the future. If money to cover the shortfall never materializes, then one has no choice but to repeatedly pay off one loan with another, accumulating additional fees each time. This continues until the individual either goes bankrupt, enters a debt consolidation program, or wins the lottery.
This is like one of those machines that’s designed to run faster and faster until it explodes. Anybody know what are those called?