The introduction of money as interest-bearing debt explains not only how the economy grows, but why it has to grow. Unfortunately, we can never get to a point where growth is “enough.”

This is exactly everything that is wrong with capitalism.

Interest requires an ever growing economy to repay it and based on that fact, there is only two ways you can get it to growth. One, through technological advancements and the second, an ever increasing population growth.

Idea of interest is fundamentally unsustainable and let me explain why with a simple example (I know it sounds silly, but hear me out). Joe has made 2 dollars from selling 2 apples that he grew. He then lends that 2 dollars to Peter who needs the 2 dollars immediately. For simplicity sake, the interest for the loan is 1 dollar. To repay that loan, Peter will need to grow 3 apples. Let's say if both Joe and Peter are both hard workers and they can only produce a maximum of 2 apples how can Peter ever repay the loan with interest? There comes 2 options I wrote before. He can either get his son to help him out in the farm or wait for a technological miracle to happen that allows him to grow 3 apples.

If we were to bring the concepts from my example to our real economy, it simply works the same way. In the 21st century our economy requires and ever advancing technological advancement to repay the interest from the debt. But for how long can we keep advancing technology to keep up with the ever increasing levels of debt? Short answer, we can't. There will be a point where we can't push technological advancement further than it already is without destroying the planet completely.

Over the past 50 years humanity have been drunk on technological advancement and we would assume that the good times will last forever. But it won't. We are already feeling the effects of the limit as climate change and other catastrophe. To deny it is pure insanity.

If we can't repay the interest in real terms, the only way out is to devalue the currency and repay it in nominal terms. Oh yes, if we were to factor in a decline population, it would be less productivity to repay the interest. Economic collapse is sure but certainly. Which is why millennials and the generations after it should not save for retirement.