Modern day fake capitalist, working class wage inflation supports: building; buying and owning property, wealthy working class investors buy: motor vehicles; insurances products and service 30 year bank loans to retirement. Wage inflation reduces working class's ability to buy other working class labours. Value of money tokens are reduced by working class wage inflation.
Old building property yearly depreciation is offset by new building inflated costs by increasing long term wage inflation.

US federal government 2008 deficit of US$10 trillion. In 2015 was US$18 trillion.
The seven years US$8 trillion increase was not do to Keynesian economic theory. US$8 trillion credits said to have provided US banks with zero interest loans, supporting US banks reserves. US banks took credits and purchased US bonds to collect a 1.5% interest payment. US federal reserve holds the credits for the credits invented, returned back to US federal reserve bank. US federal bank holds US$8 trillion in credits.
Several years ago, media reports Ben Bernanke buys US$85 billion per month of US bonds back from banks, so banks have credits to lend to borrowers.

Alan Greenspan excepts part of the blame for 2007 the Sub-prime mortgage crises, holding 911 lowered interest rates down for too longer period at too lowers rates. Leaders can only use the same excuse once, using new easily believed excuses (by badly educated thought traumatised citizens) for following busts.

Aidan: The best debt is that which is owed to you and not that which claims around 30-50% of your productive enterprise? And puts you or the nation on a debt merry-go-round you can never get off of.

Yes you can build some income earning infrastructure using debt instruments or, "your social credit"!

And it has been done elsewhere. But like all successful social credit arrangements not allowed to survive? Thanks to the greed is good imperative and antisocial individualism?

To make social credit work you first need a national income, like state owned forestry, that just selectively logs then exports quality finished timber products.

Social credit works if you exclusively use the credit you have created internally for income earning infrastructure or investments.

And having created a brand new asset, replace the debit side of the leger, (the borrowing) with and brand new realisable asset on the credit side of the ledger.

This was how my Canuck friends explained it to me and there are unbreakable rules, and mean none of this new money can ever be used for recurrent expenditure!

Even given it works as explained, there are dark forces lining up against it and anything that even smells of socialism?

As I recall, the government corporation was eventually "privatised" for a comparative pittance by elected (you can't do that) idealogues, with very deep pockets?

And its healthy income used to draw down the debt used to buy/obtain it?

My Canuck friends were ever so pleased to have to cope with new levels of back breaking work for a pittance and a fraction of what they previously earned as citizen shareholders from government funded co-operative endevour!

I don't know why you can't do that, save you need a comparatively small population and some native resources, (like Australia) plus politicians working exclusively in the national interest!

The last part an impossible ask?
Rhrosty.

The author has hit a few salient points on the head.

A primary point moving forward will be the extreme levels of personal debt, ones which will become harder and harder to pay off as employment declines. This is inevitable as the state and federal governments attempt to rein in spending (redundancy and layoffs) and the private sector shrinks as our commodity based economy continues to retract.

This ever expanding decline is evident now and will only increase in magnitude as global governments and central banks interfere more and more in the financial arena. The train wreck ahead is inevitable, the debt burden too large and the middle and lower class left with an ever decreasing ability to spend into the economy to boost economic activity, thus the cycle continues.

The share and housing markets are ridiculously over valued, wealth destruction, once corrected, which is inevitable noting my points above, will see Australians so much poorer in the coming years. My advice, get out of debt if possible, if you have moderate or high debt sell your house whilst it still retains some vale, the same goes for investments, get into cash and some physical gold/silver. Beware of the new bank bail-in legislation and hold on tight, 2016 is going to be ugly

Dr Paul Craig Roberts explains the US version of what is ahead for Australia here partially below, plus a link to the entire article at the bottom, great reading.

"The US Economy Has Not Recovered And Will Not Recover — Paul Craig Roberts

There is no “New Economy.” The “New Economy” is like the neoconservatives’ promise that the Iraq war would be a six-week “cake walk” paid for by Iraqi oil revenues, not a $3 trillion dollar expense to American taxpayers (according to Joseph Stiglitz and Linda Bilmes) and a war that has lasted the entirely of the 21st century to date and is getting more dangerous.

The American “New Economy” is the American Third World economy in which the only jobs created are low productivity, low paid nontradable domestic service jobs incapable of producing export earnings with which to pay for the goods and services produced offshore for US consumption.

The massive debt arising from Washington’s endless wars for neoconservative hegemony now threaten Social Security and the entirety of the social safety net. The presstitute media are blaming not the policy that has devasted Americans, but, instead, the Americans who have been devasted by the policy.

Earlier this month I posted readers’ reports on the job situation in Ohio, Southern Illinois, and Texas. In the March issue of Chronicles, Wayne Allensworth describes America’s declining rural towns and once great industrial cities as consequences of “globalizing capitalism.” A thin layer of very rich people rule over those “who have been left behind”—a shrinking middle class and a growing underclass. According to a poll last autumn, 53 percent of Americans say that they feel like a stranger in their own country."

The link is here http://www.paulcraigroberts.org/2016/02/17/the-us-economy-has-not-recovered-and-will-not-recover-paul-craig-roberts

Rhosty:
"The best debt is that which is owed to you and not that which claims around 30-50% of your productive enterprise?"
No, the best debt is that which enables your enterprise to become so productive in the first place.

"And puts you or the nation on a debt merry-go-round you can never get off of."
Unlike humans, which have a limited working life, there is no reason for nations to ever get off the merry go round. There is always a future to invest in.

Taxation provides a revenue stream; you don't need a separate national income (which doesn't mean having one is or isn't desirable).

Technically the money could be used for recurrent expenditure, though doing so is likely to result in a devaluing currency.

__________________________________________________________________________________

Geoff of Perth,
As the economy grows, its ability to service debt grows.
Cutting interest rates also enables more debt to be serviced.
So the train wreck is very far from inevitable. We have a choice.

Reading these posts is interesting.
There is a problem, and I think we are all in agreement on that.
No one seems to be pushing a scheme to get the economy back to its
late 1980's to 1990's parameters.
Few of us are offering firm techniques to fix things.
Does this mean no one is sure what the hell to do ?

I have no answer either, but at least I believe I know the cause of
all the troubles.
The whole period of the post war period was driven by cheap energy.
It ended with the Chinese power house of manufacturing finally reaching saturation.
It co-coincided with the end of cheap oil after peak crude oil in 2006.
There is no way around the low GDP era we now have, or the zero growth era ahead.

We need a cheap energy system NOW, not in 20 years time.
Nuclear as we know it is not cheap to build so do we have the money ?

I haven't a clue as to what can be done to keep us at our present standard of living.

Do you ?