WHEN IS AN ECONOMIC SYSTEM TERMINALLY ILL ?

[Morpheal]

A lot of commentators on economics fail to clearly indicate what is really wrong or what to do about it.

The symptoms are obvious.

The question is whether the economic system is terminally ill, and if so when will it die ?

What I can suggest is that we can know when an economic system is terminally ill.
That is not as difficult as it seems. In essence we know what an economic system is
terminally ill when it can no longer accomplish its primary task of providing for the
real needs and reasonable wants of its members.

We know that a major symptom of economic terminal illness is that there are more and
more things that need to be done, to meet needs, but there appears to be absolutely no
way to do them. No way to do them, that is, within the economic system. That being
the case, we know that the system will die. Prolonging its life only compounds and
increases the misery and suffering of those functioning within the system. So pulling
the plug becomes a very real option.

That means that the system itself must be changed. It is no longer possible to
accomplish what an economic system MUST be able to do WITHIN that system. Pulling
the plug on it then stops the additional long term suffering that comes from spending
trillions on what becomes a failing system of systemic life support, staving off the
inevitable end.

The refusal of America to allow transplant of healthy organs from other donor systems
has led to that terminal condition. Of course, using some parts of the corpse, when
life support is withdrawn, and building a viable economic organism remains a reasonable
approach. Healthy organs from communism and socialism were certainly available to
America for transplantation. America refused those transplants. No one said that the
whole system had to be murdered and replaced, but knowing that the system was
starting to die was a good time to do some transplantation.

Now, maybe it is not too late. Maybe transplantation is still an option. Maybe the
system can receive a new heart. New lungs to give it a new voice, long silenced as to
any critical and genuine appraisals of itself. A heart it most certainly needs. What
else ? Well, the analogy only goes so far, but you get my drift.

Other systems have ways to do what the system that is terminally ill cannot do.

Saving a terminally ill economic system requires introducing new ideas, the same
as transplanting organs from donors saves a dying body, giving it a new chance at life.
Maybe the system can be saved, but not as it is. It has decaying organs, dead organs,
within it. It is becoming increasingly corrupted, toxic, deadly to itself. It needs that
new kidney, or liver. It needs those new ideas as to how to do what it cannot figure
out how to do itself.

So.... lots to do.... we could list thousands of mega projects in education, infrastructure,
transportation, health care, housing, farming, energy production, and so forth. All very
worth doing, to meet real human needs and reasonable wants.

Now, why cannot any of those projects get done ?

Why cannot we do them now ?

Because the economic system is terminally ill and that illness is stopping us from
doing all those things that really should be done, and that are worth doing.

A sick system that stops progress dead, is not worth maintaining in life support.
You either do the transplantations of new ideas, from outside that system, or
you pull the plug and bury it completely. Not much choice.

Cheers.

Robert Morpheal

[truedelphi]

1. as far as the economy, the Reaganistas took over in 1980 and they adopted

A rather bastardized version of Friedman's Supply Side theory of economics and that became the gospel from which this current mess was born.

The main thought in the "Supply Side" theory concerns the cheapness of the goods. That cheapness must be obtained at any and all costs. Thus, by the time the Clintons were in office, they helped to streamline the process by which NAFTA became law. Note that NAFTA was an "Agreement" and not an "Act" - despite the fact that NAFTA overhauled our entire economy. An "Agreement" only takes a simple majority whereas an "Act" would have required two thirds majority. They wanted this major realignment done quickly and cheaply - get ur manufacturing jobs down in Mexico and cut the middle class out of its birthright of union wages with benefits. Ross Perot was marginalized for the sake of this discussion - and now that we understand his idea of a huge "sucking" sound was true, we realize he should have not been marginalized but heeded.

Also the new economic theories disposed of the notion that tariffs were good, or that local job creation was of any importance. However, these two concepts, tariffs and jobs, were long held important by major economic theorists from the time our country came into being until Reagan's term. As a student in grammar and high school, I probably spent several semesters learning about the role of tariffs. Now people get degrees in economics at Universities, and barely touch on the notion of tariffs.

What the colonists and our forefathers understood about tariffs and local job creation suggest that they believed these two were indispensable to a sustainable economy. And I couldn't say this until now - because Greenspan et al kept the non-foundational economy propped up for twenty five years, but now that it has finally imploded, taking much of the Global Economy with it, I don't think anyone can laugh at me.

For instance, over the last several weeks, the USA was pooh-poohed in the German Parliament and our economy was described in less than favorable terms. Yes the Germans now see our economy with its snake oil salesmen's charecteristics, as devious, deplorable and a disaster for everyone, especially Denmark, who relied on it. And there is much talk in Europe of letting us go down the tubes. China is intent on spending its money on its own BailOut activities, and as they have been the ones buying our bonds, without this activity w e will continue to see our economy thrashing in the bowl right before disappearing down the drain, None of us should expect the continued purchase of our bonds by China any time soon.

[leftofthedial]

2. when?

right now.

[sarcasmo]

3. When we create no new jobs, I think we are at that stage.