For very different reasons, many voices in the Energy Depletion community are also very much against raising the debt limit. Briefly, they feel that increased spending can only be supported by continued growth, and that continued growth can't be supported now that we are past the peak of oil, and probably closer to the peak of natural gas and coal than most people realize.

 

C-Realm podcast #266, A Black Hole of Debt, features Richard Heinberg, who recently published The End of Growth: Adapting to Our New Economic Reality and Dmitry Orlov. Heinberg believes that progress and well-being must be de-coupled from economic growth. Orlov believes that the United States will soon be dismantled by trans-national creditors, much as he saw happen in the post-collapse Soviet Union. 

 

In Salvaging Quality, John Michael Greer risks being associated with our favorite vegetable presidential hopeful, Michele Bachmann, by downplaying the fears of default:

 

Mind you, the horrified utterances currently being splashed around the global media, claiming that default is unthinkable and unprecedented, are nonsense of the most blatant sort. Nations default on their debts all the time. Russia did it in 1998, Argentina did it in 2002, and both nations survived; most European nations, for that matter, have defaulted on their debts more than once over the course of their history, and bankrupted plenty of banks in the process – that’s where we get the word bankrupt, you know.

 

At Our Finite World, Oil Drum editor Gail (the Actuary) Tverberg posted The Link Between Peak Oil and Peak Debt - Parts One and Two and writes:

 

The economy is closely linked with the physical resources that underly it. Most economists assume debt can rise endlessly, just as they assume GDP can rise endlessly. But if there really is a limit that prevents oil supply from rising endlessly, it seems to me that there is also a corresponding limit that prevents debt from rising endlessly.
...
Recent debt problems of governments seem to be related to a combination of (1) the tendency of high oil prices to cause recession and (2) the additional debt the governments have tried to take on, to stimulate the economy and to bail out failing banks and other businesses.
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With peak oil, what is likely to happen is that the default rate on existing debt will rise, so many people who own bonds (or other debt instruments) will discover that they are worth less than they thought, perhaps nothing. And banks and insurance companies and pension plans will discover that quite a few of their assets aren’t what they thought–they will never be repaid with interest.

In this environment, the world will change. Insurance companies are likely to stop selling annuities, because they really can’t make good on long-term promises any more, if there are too many debt defaults. Pension plans will become uncommon. People will figure out that they really can’t save very well for retirement–they will have to depend on their friends or relatives, or perhaps a government program funded by taxes.

 

Where Energy Depletion gurus diverge from Republicans is in where to spend the remaining budget. Republicans want to slash moneys that go to the poor, but keep programs that support, or rescue, the wealthy. By and large, energy depletion types want to see investment in sustainable infrastructure - while we still have the money. Heinberg, in one of his Museletters, Shrinking Pie: Competition and Relative Growth in a Finite World, writes to his students: 

 

We are at one of history’s great turning points. During your lifetime you will see world changes more significant in scope than human beings have ever witnessed before. You will have the opportunity to participate in the redesign of the basic systems that support our society—our energy system, food system, transport system, and financial system. I say this with some confidence, because our existing energy, food, transport, and financial systems can’t be maintained under the circumstances that are developing—circumstances of fossil fuel depletion and an unstable climate. As a result, what you choose to do in life could have far greater implications than you may currently realize.

Over the course of your lifetime society will need to solve some basic problems:
- How to grow food sustainably without fossil fuel inputs and without eroding topsoil or drawing down increasingly scarce supplies of fresh water;
- How to support 7 billion people without depleting natural resources—including forests and fish, as well as finite stocks of minerals and metals; and
- How to reorganize our financial system so that it can continue to perform its essential functions—reinvesting savings into socially beneficial projects—in the context of an economy that is stable or maybe even shrinking due to declining energy supplies, rather than continually growing.