I believe the greatest thing we could do to stop the climate emergency in its tracks is to end the world’s debt-money system and replace it with a new monetary model based on well-being.

Did you know that the average American household in 2018 spent roughly 52 cents of every $1.00 they earn on the hidden interest charges on a total outstanding and un-repayable mountain of debt that exceeds $71.4 trillion.

That total US debt figure has since exploded well through the $83.5 trillion mark or $252,303 per American by the end of 2020 during the Covid pandemic.

This total is based on US Federal Reserve statistics of total debt outstanding or owed by households, businesses and governments. It amounts to a total debt of $218,215 for every American. Put another way, the interest charges on total US debt of $3.620 trillion in 2018 equates to a staggering $30,467 per American household or 52.8% of pre-tax median household income of $57,652 in 2018. These interest charges are of course hidden in the prices of all things Americans consume today, including government services. This is also likely true of all other nations.

Why does this matter?

It matters because it means that over half of the hours worked by a typical American are interest payments on these debts. More than half of your working life is being wasted going to service debt charges that you have no control over.

In 2018 the $3.62 trillion in interest payments on the $71.4 trillion of unrepayable debt represents roughly 17.3% of annual US GDP, making interest costs by far the largest contributor to US GDP. What is remarkable about this statistic is that there is no official accounting for interest costs in the national or state income accounts of nations.

Furthermore, GDP has to keep growing simply to service the growing mountain of debt. In the US, total debt money has grown by a staggering 16,692% from $425 billion in 1950 to $71.4 trillion in 2018. The following graph shows the rate of total debt money growth since 1950 compared to US GDP. What is clear is the debt will never be repaid no matter how much the US economy continues to grow. Indeed, the total amount of debt outstanding is growing faster and exponentially than GDP.


Figure 1: US Total Debt Outstanding vs GDP (Gross Domestic Product) from 1950 to 2018.

The picture in Canada is similar to the US with total debt per Canadian to GDP per capita ratio exceeding 342% by the end of 2018. That ratio continues to grow over time.

Figure 2. Canada Total Debt to GDP ratio (per capita), 1961-2018

Most economists have never seen this graphic which shows that there is an inherent and built-in growth bias in all economies driven by the need to pay for the interest charges on the accumulated amount of financial debt in an economy.

What is interesting is that the total US total debt owing has been doubling (on average) every 8 years since 1950. While debt growth has slowed since the stock market crash of 2008, the burden of debt servicing (interest charges) is now more crushing that at any time since World War II.

Furthermore, because GDP growth requires ever more energy consumption, the result is increasing greenhouse gas (GHG) emissions. GHG emissions are strongly correlated with economic growth. I’ve calculated that the statistical correlation between US GHG emissions and US GDP since 1990 is a very strong statistical R-square of 0.798. In other words, more economic growth results in more GHG emissions.

Therefore, I can conclude that to slow down GHG emissions significantly could be achieved by eliminating debt money and the interest charges that are literally driving GHG emissions which are impacting our global climate.

This situation is true of every nation, since every nation has significant amounts of outstanding debt owing.

While the world is focused on the plea of Greta Thurnberg that our global ‘house is on fire’, there is virtually no discussion that a ticking time bomb of debt threatens to turn the entire world economy and the planet into flames.

Few economists understand that at the heart of our economic systems is a debt money cancer that grows without any hope of stopping and without any apparent solution.

The Ultimate Solution: What we could do on Monday

I propose that the ultimate solution to our ‘climate emergency’ is the elimination of all debt money systems.

You might think this is impossible. We have had enough trouble coming to a global agreement on reducing our GHG emissions.

As an economist, the fact that there is NO conversation about the role of debt money, viable alternatives to private-bank debt money creation, and our climate crisis is a huge blind spot in our global consciousness.

We don’t realize that money itself is a creation of our human creativity. We are ignorant of how money is created and who creates it. The truth is that 98% of the world’s money supply is created by private banks when they issue loans. Money creation as debt is like magic or alchemy; loans are created simply as bookkeeping entries. Money is therefore an illusion and not connected to anything real.

Debt money is needed to finance our lives: mortgages, student debt, car loans, business loans and government programs.

While we stress over climate change, the most important potential solution to our crisis, namely the cancer of debt, remains un-diagnosed and hidden from our discourse.

What would happen if half the reason to work for money, exchanging our scarce life energy (time) to pay for hidden interest charges on debt, is no longer necessary? Our work week would be cut in half. We would have at least 20 hours per week (of a typical 40-hour work week) to spend precious time doing things that actually contribute to our well-being and also helping to save the planet. The necessity for the economy (GDP) to keep growing would itself be slashed in half, globally. The amount of energy we currently consume to fuel our economic lives would be reduced by 50%. Instead of chasing the exponential debt curve, we could get to work reducing carbon emissions, investing in genuine renewable energy alternatives, reducing our need to move stuff around the planet, and ultimately finding time for more joy and peace in our lives.

Fortunately, there are alternatives to the debt money system that rules the world today.

What are the alternatives to this problem?

First, there would need to be a global consensus that the current financial civilization, based on debt money, is deeply flawed, unjust and a dead-end street. This system is literally destroying the planet. Second, that the debt money system was a creation of our own imagination. What we created from our imagination can be re-imagined. A system by which money is created in relationship with the resilience of natural ecosystems is possible without the need to charge interest on debt money. This would eliminate the key reason for economic growth.

Third, we could adopt the debt-forgiveness systems of ancient Sumeria, Babylon and Mesopotamia. These cultures, well before Greece and Rome, adopted laws of regular debt forgiveness or what they called a clean slate. The ancient Jewish people adopted the same laws which they called Jubilee.

According to economic historian Dr. Michael Hudson, Sumeria and Babylon had debt money systems but regularly forgave debts owed by the people; every seven years all debts were forgiven by the emperor or king. This freed farmers and labourers from the burden of debts giving them the freedom of time to be good stewards of the land, be ready to defend their communities in times of war and ultimately to enjoy a good life free from financial anxiety.

Had the US, Canada and other countries adopted the Sumerian clean-slate laws (forgiving debts every 7-8 years), we would not be in the debt-cancer crisis today. As noted, the US total debt has doubled every 8 years, on average, since 1950. Had debts been forgiven, our GHG emissions would have also presumably been much lower than today. The pressure to grow the economy would have been eliminated and the possibility of a happier and more equitable life for all Americans could have been possible.

Fourth, there are real alternatives to debt money creation by private banks. Public banks — banks owned by the people and for the people (like the Bank of North Dakota and the Alberta Treasury Branch in Canada — can create money through issuing credit without the need to charge interest. Central banks, including the Bank of England, the Bank of Canada and a future US Central Bank, could also issue money without debt charges in amounts that are sufficient to finance living wages for everyone, a healthy environment, reduce GHG emissions, finance renewable energy, and an economy of well-being.

We could restore the creation of all money as a public utility as Benjamin Franklin, Thomas Jefferson and Abraham Lincoln long-ago envisioned for the US, though a network of local to regional to national public banks. Money would become the servant of humanity, not our master. All interest charges could be eliminated. The amount of money needed would be created in sufficient amounts to meet the life needs of our communities and be in harmony with ecological conditions of Nature. I’ve shown how this system would work in my book An Economy of Well-being: Common Sense Tools for Building Genuine Wealth and Happiness (2018).

Given this reality-check, we can no longer say that we do not have solutions to the climate emergency.

What would happen if debts were forgiven and interest charges eliminated?

Ending debt money systems common across all nations could reduce global GHG emission in half. This would immediately result in a cooling of the planet achieving quickly the desired 1.5 C maximum rise in global temperatures.

Global GHG emissions, which were 53.5 GtCO2e, (of which 34.5 GtCO2e was from country emissions and 19.0 GtCO2e from land use changes) in 2017, need to be reduced by approximately 25 percent and 55 by 2030 to put the world on a least-cost pathway to limiting global warming to 2.0 C and 1.5 C, respectively. This means that all countries must reduce total carbon dioxide emissions by between 13.37 GtCO2e to 29.42 GtCO2e by 2030 to close the 2.0 C and 1.5 C , respectively. These are daunting targets. We know now that the G20 nations are collectively not on track to meet their 2030 climate commitments

In the US eliminating the massive interest costs imbedded in US GDP could result in absolute reductions in CO2e of at least 17%. Given that other nations have similar outstanding debts, significant reductions in global CO2e emissions would be possible.

Looking at the US alone, the second largest GHG emitter in 2017 (5.3 GtCO2e compared with China’s 9.8 GtCO2e) the immediate elimination of interest costs in the US economy could result in absolute CO2e emission reductions of at least 916 million tonnes CO2e or a 17.3% reduction. Eliminating fossil fuel subsidies, investing in more renewable energy capacity and increasing energy efficiency would go even further.

If other debt-based-money nations with similar debt burdens as the US were to phase out their debt money systems as well as phase out fossil fuel subsidies, which Jian Liu, UN Environment’s chief scientist estimates could reduce global carbon emission by 10% reduction, the world would be well on its way to meeting the global CO2 reduction target by 2030 at least for the 2.0o C temperature increase target.

Let’s Act Now!

The fact that we are not having this debate or that our young people, led by courageous teenagers like Greta Thurnberg, is perhaps a result of collective ignorance. We no longer have an excuse not to act on what I have presented.

We are neither aware of these alternatives nor urging global leaders to act now on a solution the is literally actionable on Monday is unconscionable.

There is a real solution to the climate emergency if we are willing to sit down together and explore the tangible options to a debt money system.

We must explore these options, for the sake of the well-being of our children.

I’d like to invite Greta Thurnberg and all of her young and courageous peers to join me in urging world leaders to end the debt money system and reimagine and build a new monetary system that ends the debt money forever and makes money the servant to a better and happier planet and human future.

The climate crisis is an opportunity to awaken and increase our human consciousness. Namely a collective consciousness of love.


  • Alan Blanes says:

    Thanks Mark! It was great to see on @TheRealNews today that all houses of the California Legislature have passed the legislation legalizing public banking in that state. I sense that if we get more Green MPs and Bernie wins in Nov 2020 that the public interest will begin to prevail over the insane neoliberal construction that the economy exists only for maximizing short term profit to equity holders.

  • Bernie Amell says:

    Thank you (again) for this offering, Mark.

    I fear, however, that there is such a tight bond between those who benefit from the current economic system and those who govern, that matters will have to get to the critical edge of collapse before there is sufficient public/political will to fuel the systemic change that you are advocating. I am focussed on the creation of “lifeboat societies” that will serve as the vessels for weathering the incipient collapse of current systems, informed by ideas such as yours. Such communities could provide testing grounds for such ideas, and as sources of inspiration for other communities to emulate in the hope of averting catastrophic effects of either chaos or dominance by some new form of strong man leader.

    It is no doubt apparent that I have abandoned hope that our problems can be solved at the nation scale of governance (let alone, international scale). We don’t seem to be able to govern ourselves effectively at large scales. We (our species/civilization) keeps creating these large scale institutions due to the lure and promise of great potential benefit due to scale. Unfortunately large scale institutions/companies very rapidly devolve into exploitive super-entities that are governed (and so behave) in a manner that is destructive of the very components of human potential that enabled their existence and early success. I am thinking of components such as objectively verified science, various sources of trust, the rule of law and universal human rights.

    I consider Canada could be an opportune place for such lifeboat communities to be established… but the time is short and the perils are many. Are you are interested in such local scale initiatives?

    • RADU SESERMAN says:

      Hello Bernie,
      I am really interested in planning for, and then creating communities based on economically sustainable ideas, as the credit money is. What you refer to as “lifeboat societies” probably I refer to as “sustainable economic ecosystems”.
      For a long time I am searching for somebody with such an interest and you are the only person I found. There are all kind of well intended initiatives out there, but they just want to improve the system, not redesign it.
      Without doubt, such a change needs to be tried and honed on small communities before expending it to the entire society.
      I would love Bernie to exchange ideas with you. Please reach me at radu.seserman@zoho.com
      All the best,

      • Hi Radu and Bernie, apologies for my delayed reply on my website platform. Short answer to both of you is YES! I’m also working on ‘lifeboat’ ideas and models mostly with First Nations in Canada who in my opinion represent the best hope for our future, should they choose to test some of the ideas and models for local living economies I have articulated in both my books. I work very closely with several First Nations who seem willing to try testing these new models. Please connect with me via email (anielski@gmail.com) and we can continue this exploration.

    • Hi Bernie, apologies for my delayed reply on my website platform. Short answer to your challenge is YES! I’m also working on ‘lifeboat’ ideas and models mostly with First Nations in Canada who in my opinion represent the best hope for our future, should they choose to test some of the ideas and models for local living economies I have articulated in both my books. I work very closely with several First Nations who seem willing to try testing these new models. Please connect with me via email (anielski@gmail.com) and we can continue this exploration.


    Thank you Mark!
    I just purchased your book to learn the system you present. I should return with comments after I read the material.

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