Our system has always been based on inflation, planned obsolescence, (waste/inefficiency), and the ability to leverage a perceived asset (borrowing). Once that perceived asset is "marked to market" or declines in value in real terms, there is no ability to borrow against the asset or, as it is today, loans become upside down.
When Social Security was first introduced 42 working people paid into the entitlement for every one person collecting the benefit. Today only 3 -5 people pay in.
My mother and father bought their home in 1959 for $31,000, a large sum of money. Today it is worth 25 times more but in inflated dollars.
We have run out of the ability to leverage unless we reinvent how we leverage.
Building “Green” 4 family homes may be a form of leverage. Buying a multi- family home with other family members may be a solution to leveraging immediate and extended family income.
Governments bonding debt is dangerous. It is like applying “Bondo” to a hole in a car. It just plugs a gap but there remains structural damage.
If no one applied to go to college for 10 years, what would happen to tuitions?
If we feed every family in Africa 4 meals a day and provided shelter, what would the birth rate in Africa be?
If Health Insurance is "free" would people shop around for the best price for services?
When demand drops or competition increases, prices will drop. We may experience what Japan is currently experiencing: deflation. And that would end our ability to leverage and dampen our capitalistic system. China has an authoritarian, centrally planned form of capitalism. The USA and other countries employ a democratic free market form of capitalism. The two are very different. The Chinese can manipulate trade and exchange rates to their benefit. Their fear is that the Chinese population, being very diverse and large, will be difficult to control if organic growth and exports slow down. They have a huge problem. And so does the world economic order.
The 1% consumption tax proposal I use in my web site, www.helpformanufacturers.org, is a way to have every American citizen, (and illegal visitors), become an investor and stake holder in our Health Care system. I am confident that all of us waste more than 1% on nonsense that contributes little or nothing to our well being. A lot of this junk comes from China.The 1% would be linked to the GDP and will by definition provide additional funding as the economy expands. Businesses could then redeploy cash flow for re-investment within their business models. This is an example of Smart Tax Policy.