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Back in the 1930′s, Irving Fisher introduced a concept called the ‘debt supercycle’. Simply put, it posits that when there is a buildup of too much debt within an economy, there reaches a point where there simply is no other available solution but to let it rewind.
We are at that point in our economy, as are most other major economies around the world, claims John Maudlin, author of the popular Thoughts from the Frontline newsletter and the recent bestselling book Endgame: The End of the Debt Supercycle and How It Changes Everything.
For the past several decades, excessive and increasing amounts of credit in the system have allowed us to live above our means as both individuals and nations. We’ve been able to have our cake and eat it, too. Now that the supercycle has ended and the inevitable de-leveraging cycle is staring us in the face, we will be forced to set priorities in a way that has been foreign to our society for over a generation.
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Your last comment is well put Will, and makes sense; however, it most likely comes from someone who hasn’t yet been disenfranchised (no offense intended). You can hardly blame Alfredo. I listened to the first few minutes of this video, and had to bail out. The discussion is so conventional and hopeless. A total paradigm shift is needed, and it isn’t going to come from arrogant people who still believe they can solve the problem with their intellect. I don’t believe the U.S. Constitution can save us either. Unfortunately, I believe the necessary change will come only after the existing system is torn down. That pain and suffering will come to bear on everyone, including the wealthy and arrogant.
AMEN brother Will “:O)
By now means to I wish this to be the last word, but the concept of the 99% concerns me (I think that is the underlying thread of some of the comments). The problem with the idea of the 99% is that it defines the vast majority of us as victims – and victims make lousy change agents. They tend to be shrill, judgmental and inflexible. In other words, they are often the mirror reflection of what they insist is the problem.
The most dangerous trend for the status quo is that people will simply stop paying attention to it. This doesn’t require marches, manifestos, lists of demands or anything else. it simply means that we begin to pay attention to each other. We have a conversation. We follow our intuition. Not terribly glamorous in the context of the prevailing construct – but extraordinarily powerful.
This is not so, for two main reasons:
1 There is more than twice the amount of human resources of 50 years ago
2. Technology has allowed for an unprecedented amount of goods and services to be created without 80 hours a week of many slave laborers
The truth is that the world is overdue for a full time week of 20 hours and for governments to regain the power to create and lend money without interest, charging only for the true cost of the money service
As for the ‘Debt Narrative’ it’s time to create one where people demand their tax paid money (including from their ancestors) back from government because of the abusive misuse from big interests, namely, from when Bankers conned Congress in 1913 to create the ‘federal bank’.
Will makes an intriguing argument. And blaming Bush and those “evil Republicans” is just part of the old template. Change is in the air…
The time to make the hard decisions was when Bush inherited a surplus and went on an insane spending spree in favor of his wealthy friends. It is not a mystery. Now the results are to finish the job by destroying everyone but the wealthy few and some bond traders while allowing the casino to remain open for their usual scams. It is not an acceptable “reality” that the US spend twice as much for “health care” forcing us to hunker down and pay what “they” demand. If we want our democracy that the founders were trying to put in place, revolution2 may be in order and for the same reasons. King George and George Bush/Romney have much in common.
I agree with Will’s comment above. I also think that it is the height of hypocrisy to have a system where there is such a huge, artificially created divide between the haves and the ‘have nots’ based on a false economy. In other words, there is more wealth in the world than we have been led to believe. And let’s not forget that it has been the great society and the promise of a life free from want, hardship and material servitude that has allowed access to education, creativity and awareness to flourish in recent decades.
What’s fascinating about this and other views along the lines of Martenson’s and others is this idea that there is a way to maintain a debt based monetary system. These discussions assume that there is a way to pay down the debt by making “hard choices”. Their views appeal to the stoic part of our psyche; we must pay for our sins and make others pay for theirs.
It’s an illusion. The debts will not be paid but default is only an event in the process of moving toward a monetary system that is not based on scarcity. Seems impossible? Perhaps, but consider the alternative. That alternative will not be as reasonable and somber as Mr. Mauldin’s view. Best we start to think about how how to structure a monetary system that is not based on debt.