Mordechai Treiger | Living beyond our means

We're a nation of borrowers. According to Wednesday's USA Today (or does that make it the "USA Two days ago?") the average borrower's credit-card debt now stands at $1,717. The government borrowed billions from China to finance its no-tax and spend policies and doubled the national debt to $10 trillion over the past eight years (though, to be fair, I got this figure from the most recent Presidential debate, so there's no guarantee).

And while everyone knows about our fiscal irresponsibility, it's important not to forget that for years, we've also been borrowing on a different ledger: against the planet and against the future.

Legal Studies professor Eric Orts, who teaches a course on environmental management, thinks that both the financial market and the environment suffer from improper accounting. Certain economic assumptions are made that take ecosystem services for granted, but "when the underlying assets and services disappear or become severely depleted" those assumptions are undermined.

I only made it through Econ 002, so I'm not going to pretend to have any special insight into the current financial crisis. But professor Gwen Eudey did do a good job making sure her students understood why the fundamentals of our economy are not so strong. Here's what I got out of it:

We financed our borrowing on the back of rising home values across the country. And when the housing market collapsed and homeowners defaulted on their mortgages, lenders were left holding assets worth less than what they'd lent out in the first place. Those lenders owed money to others, and defaulted in turn. The entire economy, in other words, was tangled up in a system of loans backed by housing values built upon a foundation of sand.

Similarities between the financial and the environmental crises are striking. In both cases, false accounting encourages the use of assets past the point of sustainability.

Take food. It used to be that food was grown only with sun, earth, water and air. But according to Michael Pollan, whose book some sophomores may have once flipped through, it took almost half a calorie of fossil fuel to produce one edible calorie by 1940. Today, it takes 10 to bring a single calorie from farm to supermarket.

A food supply predicated on fossil fuel is simply not sustainable, because no matter how much you drill, baby, drill, you can't hurry the hand of time. Entering fossil fuels into the agricultural equation - to any degree - threatens the integrity of the entire system, because at that moment, the system ceases to be renewable.

Further, the use of fossil fuels imperils our ability to sustain productive farmland into the future. "You're basically just pushing the land to its limits," said Environmental Studies professor Alain Plante. "You export valuable material in that plant by shipping away the corn or the wheat. You take water and you take nutrients with it. . Obviously at some point you run out of land."

The problem is not just limited to agriculture. Orts cited freshwater, fisheries, forests and the atmosphere as examples of other resources whose true values aren't accounted for in most economic metrics.

In Econ 002, Eudey also mentioned the ideas of 19th-century economist Thomas Malthus, who explained that there are natural limits to human growth. But to Eudey, Malthus is simply a straw man. She explained that, at least in developed countries, productivity growth has managed to negate his concerns.

And while Orts agreed that "technologies and economic innovation have often allowed humanity to escape Malthusian limits to growth," he added that "sometimes Malthus is right, and a new technology or innovation does not become available (or not available fast enough) to offset a scarcity of resources."

Canadian conservationist David Suzuki once commented that "'growth forever' is the creed of the cancer cell and the economist." I don't think it's necessary to point out that cancer cells cannot, in fact, grow forever, because they ultimately destroy their own hosts.

If the financial crisis has taught us anything, it's that a system that pushes economic growth without properly accounting for the value of its assets is bound to fail.

The financial system is a human institution that plays by human rules: When the government needs more money, it can simply borrow more.

The planet, on the other hand - the planet has no bailout.

Mordechai Treiger is a College junior from Seattle and a member of the Penn Environmental Group. His email is treiger@dailypennsylvanian.com. Fridays with Mordi appears on alternating Fridays.

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