If a climate apocalypse is imminent, should we bother paying our debts?

A serious answer to a half-serious question.

If a climate apocalypse is imminent, should we bother paying our debts?

A serious answer to a half-serious question.

Stereotypically, there are two sources of anxiety constantly nagging all millennials at a semi-conscious level like a pair of battery-draining mobile phone apps that can’t be uninstalled. One app is called “Massive Debt,” and the other is “Anxiety About an Impending Climate Catastrophe.” There’s even a certain harmony to them; an inexorable descent into personal financial oblivion pairs nicely (at an aesthetic level) with a perceived inexorable descent into universal destruction. The latter, it would seem, may even cancel out the former.

If Earth really is about to stop being habitable, why pay your debts at all? If we’re literally talking about human extinction being inevitable in the next decade or so — and more on that in a minute — we’re free, and there’s no point in doing anything that doesn’t give us raw, hedonistic pleasure. I should add, though (and please don’t take this the wrong way) that were that the case, I wouldn’t be writing this right now.

If you get your apocalypse news from Twitter, it sounds like the ultimate debt jubilee has arrived, and it’s called Armageddon. According to @leftistgrrrl, for instance, “the new climate report that came out has inspired me to not pay back my 50 grand student loans cuz nothing matters anyway and we're all gonna be underwater in 10 years.” (I’m not sure if “underwater” is supposed to be a pun or not).

I don’t know about you, but I wouldn’t stop at skipping my student loan payments. I’d be making like @babyhairaffairs and taking on as much debt as I could. “I feel better about my credit card debt knowing we’ll all be dead from climate change,” she wrote.

Let’s assume, for a moment, that this is a reasonable course of action for a wily individual to take in pursuit of maximum pleasure before the lights go out. Is there a downside here? In the “human extinction in a few years is 100 inevitable” scenario, clearly no. But what if “apocalypse” is just shorthand for “gigantic disaster?” If some critical mass of people took out huge loans, and used them to, say, buy gold, or bitcoins, or insulin, or whatever they thought they could use as currency after the The SHTF Event, perhaps that could cause some kind of media-fed banking panic, and hasten Earth’s transformation into Mad Max Earth.

There’s a name for this particular brand of panic: an “availability cascade,” a term coined in 1999 by the economist Timur Kuran and the legal scholar Cass R. Sunstein. It describes a situation in which a certain set of perceptions become overly available due to their presence in the media, leading to some kind of shift in public behavior, for good or ill. The central example Kuran and Sunstein use in their 1999 paper is the Love Canal Disaster, a massive, Carter-era media shitstorm surrounding a toxic waste dump in the town of Love Canal, New York. Long story short: the revelation of potentially hazardous waste in the area resulted in daily headlines and an impressively potent freak-out among residents, ultimately leading to a government-funded evacuation, and the complete ghosttown-ification of Love Canal. Despite all this, “it remains unproven that the contamination of Love Canal, assuming it occurred, ever posed a significant risk to anyone,” Kuran and Sunstein write.

So could the presence of climate nihilism prompt some kind of debt crisis that tears apart civilization too soon? Could we tweet our way to an even faster doom?

I ran this possibility past Joseph Tainter, an archeologist and anthropologist who specializes in the collapse of societies, and superficially, his worry was somewhat similar to mine. “Everything today runs on credit. My understanding is that in 2008, credit nearly froze up. That would bring on a collapse — ATMs would not dispense cash, stores would not accept checks or cards, stores would not be able to restock shelves,” he told me in an email. So my fears are sort of justified, but is anything like this happening?

“If this were happening on a large scale, people would be [trying to borrow] like crazy, no one would lend, and interest rates would soar,” economist Dean Baker wrote to me when I emailed asking about this banking collapse scenario. “We don't see that,” he added, somewhat reassuringly. Although interest rates are up enough to piss off our president, they’re hardly soaring, and lending is experiencing a minor lull.

But Tainter also told me taking on a bunch of debt for the purpose of partying as civilization crumbles is, in a way, the opposite of how people intellectualize a coming collapse — which is that they don’t. “The point you raise assumes that people A) pay attention to current events, and B) plan ahead,” he wrote, adding, “Most people are not aware that they are making assumptions in their reasoning, let alone what those assumptions are.” Apparently, a lifetime of studying civilizational collapse gives you very little faith in humanity.

“By the time enough people believe the end is near, it will already be too late for people to borrow,” Tainter told me. As bleak as that sounds, it’s excellent news if you are truly convinced the apocalypse is already on the horizon right now, and you’re dead-set on having a Kenwood DNX996XR 6.8 audio receiver and set of Alpine SWR-12D2 Type-Rz subwoofers in your car when the Great Flood arrives. So far, there’s no epidemic of climate anxiety prompting people to take out huge, foolish loans and somehow damaging the economy in the process, and there probably never will be. Basically, if you’re an apocalypse true believer, and you feel like taking on the risk, go nuts.

And if the morality of screwing over your lender — even for a short time — is nagging you, here is some information you might find useful.

  • The banks are largely responsible for bankrolling the practices that lead to climate change in the first place. Even after the signing of the Paris Agreement in 2015, all the major banks have continued to finance oil, gas, and coal companies. Most of them dialed back their support slightly, but JPMorgan has invested an additional $200 billion.

  • If someone at one of the financial institutions where you do business called you a deadbeat, that would make them a massive hypocrite. Companies use defaulting on their loans as a business strategy whenever the dollars-and-cents work out on paper. For example, a company might use part of its stock portfolio as collateral to borrow money, only for the venture to not pan out, so it could decide just to let the bank keep the stocks rather than keep plugging away at something that might decrease the value of its share price. In at least one instance, a company actually paid another company to default in order to win a Wall Street bet.

  • If you are an unashamed deadbeat, your troubled debt may not even belong to your original lender, assuming it’s not student debt. There’s a good chance your debt was purchased by some sketchier company for an average of 4.5 cents on the dollar. That means the person calling you to try and collect your money has actually invested barely anything, and instead just paid a nominal fee for the privilege of shaking you down for a potentially huge windfall of cash.

In fact, according to anthropologist David Graeber’s book Debt: The First 5,000 Years, the threat of an impending financial apocalypse is, paradoxically, the turbocharger in the engine of capitalism. Here’s an absolutely breathtaking excerpt from this surprisingly riveting book about the world’s most dismal topic:

Presented with the prospect of its own eternity, capitalism — or anyway, financial capitalism — simply explodes. Because if there's no end to it, there's absolutely no reason not to generate credit — that is, future money — infinitely. Recent events would certainly seem to confirm this. The period leading up to 2008 was one in which many began to believe that capitalism really was going to be around forever; at the very least, no one seemed any longer to be able to imagine an alternative. The immediate effect was a series of increasingly reckless bubbles that brought the whole apparatus crashing down.

But I have some bad news about this wondrous, debt-slashing apocalypse: if it’s really coming, it’s not going to be all that soon. Sure, that UN report from 2018 did say humanity needs to cut its emissions by nearly half within 12 years, but when Rep. Alexandria Ocasio-Cortez says the world is going to end in 12 years, and conservatives have a field day online, the conservatives are kinda right; the UN report didn’t say that at the 12-year mark, God’s finger will materialize and flip the climate switch from “fine” to “everyone is dead now.” It just said after that point, if we still haven’t acted, we’re taking on the risks that come from warming the Earth above and beyond an arbitrary high water mark: 1.5 degrees in this case.

And we might not even be at 1.5 degrees in warming in 12 years. According to climate scientists Kate Ricke and Ken Caldeira, it takes about a decade for emissions to translate into higher temperatures, and others have suggested that it might take even longer. So even if you do choose to believe in the apocalypse, rather than the much likelier outcome — a world that sucks a lot more than it does now, but one in which humans still exist — the world, and debt collectors, will still be around to harangue you at least a few more decades. If you can make it that long, there’s a good chance you might qualify for the government’s existing debt forgiveness program, which kicks in after 25 years of faithfully making payments, assuming the current president doesn’t cancel such programs, as he has promised to do. It’s worth noting that candidate Bernie Sanders has promised to cancel all student debt if he gets elected. Joe Biden, meanwhile, spearheaded an effort back when he was vice president to make it harder to reduce student debt.

That being said, feel free to default on your student debt as an act of protest! In fact, someone suggested a debt strike on the Extinction Rebellion subreddit back in May. That would be a bold move, and I would personally tip my hat to you when your wages were garnished — something the federal government is still very much empowered to do for the foreseeable future. But if a debt strike is the reason you’re going into default, be aware that the only apocalypse you’re probably going to see in your lifetime is the one on your credit report. And in the meantime, the regular ass climate strike coming this September seems to me like a better use of your energy.

Mike Pearl is an answerer of hypothetical questions, and his book The Day It Finally Happens: Alien Contact, Dinosaur Parks, Immortal Humans―and Other Possible Phenomena will be released on September 17