Co-founder of Equicapita , Stephen Johnston, presents at the Ludvig von Mises Institute of Canada. The Liberty and Oil: the Foundations of Modern Civilization. Stephen’s topic of discussion – Exponential Government in a Linear Economy. “We are currently witnessing the inevitable collision between the exponential government economy (debt/fiat driven) and its proxies the Finance, Insurance & Real Estate sectors (“FIRE”) and the linear, underlying capital/production based economy. The current financial crisis is a direct result of the capital destruction caused by growth in the size of government, risk subsidies for the FIRE sectors, and artificially low/negative real interest rates that have skewed western economies to consumption. All this has taken place at the expense of the productive /capital based economy in the west. In simple terms government has directly or indirectly created debts that do not have offsetting productive (cash producing) assets to service them = CRISIS.