The Dangerous Myth of Endless Growth: Why Our Economy Might Be Headed for a Cliff
We’re constantly told that progress is inevitable, that economies will keep expanding, and that resources will always be there to fuel our ambitions. But here’s the uncomfortable truth: this belief in indefinite growth is a dangerous illusion, and it’s setting us up for a potential economic collapse. But here's where it gets controversial... What if the very foundations of our economic systems are built on a flawed assumption—one that ignores the finite nature of our planet’s resources?
Economists, policymakers, and even everyday individuals often operate under the assumption that the status quo will persist or improve. Politicians promise prosperity to secure votes, universities assure students their degrees will guarantee success, and no one wants to entertain the possibility of decline. And this is the part most people miss... During the post-World War II era up to 1973, when oil prices were rock-bottom, most believed the oil supply would last forever. No one paused to consider that this was a temporary anomaly, not a permanent reality. If things don’t go as planned, debt bubbles could burst, dragging the economy down with them. This was the core message of my recent talk at the Minnesota Degrowth Summit, where I explored the consequences of this illusion.
In this article, I’ll share key insights from my presentation, along with links to the full PDF [https://ourfiniteworld.com/wp-content/uploads/2025/10/Tverberg-Presentation-Oct-25-1.pdf] and the Vimeo recording [https://vimeo.com/1131063715] of the summit (my talk starts around 1:55). For those who prefer reading, the transcript and timing outline are available on the recording’s front page.
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Between 1920 and 1970, U.S. oil production soared. Early extraction was easy and close to consumers, but physicists like M. King Hubbert warned this couldn’t last forever. Yet, most dismissed these warnings, assuming obstacles were distant concerns. Even as other countries began producing oil, the U.S. faced challenges with its own reserves, requiring complex operations like extracting oil from Alaska’s harsh climate and transporting it via pipelines and ships.
Low oil prices were a boon to the economy—but only while they lasted. Consider the impact of affordable food on personal finances. If food consumes 50% of income, there’s little left for discretionary spending. But when food costs only 5-10%, families can afford extras like vehicles or education. Oil and energy are the economy’s lifeblood; when prices are low, there’s room for growth and innovation. During this era, small businesses thrived, and goods were largely produced domestically, with minimal need for complex hierarchies or energy-efficient technologies.
But here's where it gets controversial... As the economy grew more complex, it required a strong middle class to sustain demand for goods like cars and homes, keeping oil prices stable. However, if the middle class shrinks or younger generations earn less than their parents, maintaining these prices becomes impossible. Recessions often followed oil price spikes, forcing governments to bail out economies with more debt. Since 2008, U.S. debt-to-GDP has skyrocketed, with much of the added debt funding programs for the poor and elderly.
Today, U.S. debt levels are widely seen as unsustainable. One study [https://www.nber.org/papers/w15639] suggests that when government debt-to-GDP exceeds 90%, economic growth stalls. The U.S. ratio now stands at 120%, well above this threshold. Alarmingly, interest payments on debt already surpass defense spending, meaning taxes must rise just to cover the interest. And this is the part most people miss... Growing debt, especially during periods of stagflation, is a hallmark of long-term secular cycles, which researchers like Peter Turchin and Sergey Nefedov argue lead to societal collapse over decades.
In their book Secular Cycles [https://www.amazon.com/Secular-Cycles-Peter-Turchin/dp/0691136963], Turchin and Nefedov examine how societies surge after gaining access to new resources, only to collapse when population growth outstrips capacity. Wage inequality, debt, and stagnation worsen, eventually leading to decline—a pattern echoed in Joseph Tainter’s The Collapse of Complex Societies [https://www.amazon.com/The-Collapse-of-Complex-Societies].
If my analysis is correct, the future looks grim. But what does this mean for us? Here are a few thoughts for my readers:
- The Full Picture: My presentation included 51 slides—check out the PDF [https://ourfiniteworld.com/wp-content/uploads/2025/10/Tverberg-Presentation-Oct-25-1.pdf] for the complete details.
- Growth Isn’t Enough: Even a rapidly growing energy supply with high EROI (energy return on investment) wouldn’t prevent collapse indefinitely. Population growth and pollution would still push the system to its limits.
- EROI Explained: I mentioned EROI briefly, assuming some familiarity, but didn’t define it. It’s the ratio of energy gained to energy expended in extraction.
- The Limits of Alternatives: Wind, solar, and nuclear energy need extremely high EROIs to be viable, but even then, they may only delay the inevitable as the system hits its limits.
Controversial Question: Is our pursuit of endless growth a recipe for disaster, or is there a way to sustain prosperity without exploiting finite resources? Share your thoughts in the comments—let’s spark a debate!
By Gail Tverberg via Our Finite World [https://ourfiniteworld.com/]
