Why the Stimulus Packages Will NOT Work

by Joshua on February 25, 2009 ยท 1 comment

Recently congress passed the nearly $800 billion “stimulus” package (passed with strong republican opposition). For more information on the package itself, you can even go to the website devoted to it to learn more. There are many mixed views on it’s ability to help, harm, or do nothing to our economy. I confidently believe that it will likely be one of the latter two – harm or do nothing.

We may see a short upswing, perhaps even a temporary rebound, but it is likely to be years from now. We have yet to really see the impact of 3.6 million lost jobs until each one of those people run out of unemployment benefits – that’s when the proverbial shit will hit the fan.

However, this stimulus package is no better than using a bucket on a barn fire – any relief will be an illusion and not a fix to the real problem. The system doesn’t work, so the stimulus will not work. Consider the following…

Everything on this planet relies on energy. The only sustainable place for energy to come from is the sun. Our plants need this to grow, we need plants for food (or food for animals that we eat), and we use this energy (in one form or another – oil is just old sunlight, and will run out very soon) for our technology that runs everything of our modern life.

There is a finite amount of sunlight reaching the Earth every day. This energy, along with our planet’s ability to convert that energy into food and usable resources, has a limit. There are many things that can alter our capability to grow enough food, but ultimately there is a ceiling on how much we can produce (and transport, store, process, clean water, et cetera) based on this finite amount of energy.

It follows that if we can only make so much food, so much clean water, only have so many resources that are renewable (by the same process of converting solar energy), then we can only support so many people sustainably.

Therefore, if we live in a finite world with finite resources we can support only a finite amount of people (with constant birth/death rates).

This limit is called a carrying capacity; a term most widely used by ecologists to describe “the maximal population size of a given species that an area can support without reducing its ability to support the same species in the future.” (Daily & Ehrlich, 1991) Daily & Ehrlich go on to say..

“The rapid depletion of these essential resources, coupled with a worldwide degradation of land and atmospheric quality, indicate that the human enterprise has not only exceeded its current social carrying capacity, but it is actually reducing future potential biophysical carrying capacities by depleting essential natural capital stocks.”

There are generally two ways a carrying capacity affects a population: (1) the capacity is reached and the population plateaus to the sustainable, optimum population and, ceteris paribus, remains there; or (2) the capacity is passed (usually quickly) and the population reaches a critical point where resources are significantly exhausted and mass deaths result in a severely reduced population or complete extinction.

(photo from Experiencing the Needs of Future Generations)

A third way is possible: breaking past the carrying capacity, but quickly coming back down to it. Because of the complex nature of the human race’s carrying capacity, there is a [very slim] chance we can achieve this third option, or at the very least reduce the impact of the more likely second route.

The way we mitigate damage done as a result of passing our carrying capacity and return to a sustainable world can largely be accomplished with (and cannot be done without) a sustainable, steady state economy.

So, why won’t the stimulus package work? Because our current economic system is based on continual, undeterred growth. We just came the conclusion that we live in a finite world – how can undeterred economic growth survive in a finite world? It cannot. This is us passing the carrying capacity quickly and we’re only trying to speed things up by continuing with our current model.

No matter how many bail-outs, stimuli, or tax-breaks our government(s) try to fix dire economics the true problem will never be solved – our economic system does not work. We have passed our carrying capacity and nothing will change that, but not all is lost! With the adoption of a sustainable way of life – including a steady state economy – we can change our course.

The real bail-out that we need is legislation to move toward a steady state economy – to save what we can, who we can, before our growth puts us so far past our carrying capacity that we collapse and billions die. Those left will have to live with the knowledge that our collective greed destroyed us all. Perhaps they will institute laws limiting our growth if we cannot.

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