There are several things that an economy can do. It can get bigger, get smaller, or stay the same. Oddly enough, anything aside from getting much bigger all the time is considered to be a bad thing.

An anecdote: My aunt, who is well known in the real estate industry in Australia, would frequently discuss the growing real estate bubble that was bound to burst at some point. She would say that investing in real estate was a good thing, but as she watched the inflated prices of properties spiral out and up, she started to caution high rolling profit seeking property investors. And she was right. At one point on her facebook page she even warned all the US relatives to put the breaks on risky property investment: to either get out with a smaller profit than to wait too long, out of greed, and end up with the property value plummeting and with no buyers in sight. For those of us who took her advice, we made it out of the market with some profit, but for those who ignored her predictions, disaster is too mild a word! Think: Las Vegas!

What once was merely a perverse belief of economists (and various other pseudo-scientists) is now approaching the status of common sense. In any other sense, ‘stagnation’ means no growth…but just thinking about no growth makes economists shudder in nameless terror, so they redefine it as meaning ‘slowed growth’.

Any half-bright child can tell you that there is Only So Much of anything — and the quicker you use it, the quicker you’ll run out. I was watching my daughter the other day all dressed up in a lovely pastel princess costume, wearing long white gloves, a shimmery cape, and an impressive tiara. She was waving her magic wand to create a several glasses of magic lemonade, speedily supplied by a fairy godmother (my wife). Oh, but so many little elves of the forest wanted to sip that lemonade and before you count to fifty it was all gone. Again my daughter waved her magic wand and more lemonade appeared. It too was quickly consumed, this time by all of my daughter’s friends who were also twirling about as summer, sky, rose, stream, and woodland faerie princesses. Another swoosh of the wand and more lemonade, until finally close to dinner time, oh no, the faery godmother had no more lemonade.

Of course, it’s so much more complex than that. By the time economists get done telling you how much more complex it is, you may end up agreeing with them — either to shut them up, or because they really have convinced you, somehow.

How? Well, maybe because they are ‘experts’, and you are a ‘layman’…maybe because the argument itself takes so many twists and turns that you end up believing that you’re facing south when you’re really facing north. Or, you may just not be equipped to tell the difference between words that are true and those that are merely persuasive. All sorts of factors may be involved.

But simplicity really is a valuable concept, too. And simplicity will tell you that you can’t just keep growing. Nothing works that way. Well, that’s not entirely true — cancer works that way. Cancer just keeps growing and demanding more and more resources until everything dies.

Hmm, nearly out of room. I haven’t yet mentioned that few economic theories (or business models, or religions, or political party platforms) do not immediately assume that continuous and ever-increasing growth is a Very Good Thing. Solid state economics is one of those few, but that’s a tale for another time.

At this point it would be a great step forward to just get the economy to level off. Sometimes as was the case recently in Las Vegas, NV. the economy can grow so fast & furiously the it has no other choice but for a huge bubble to burst. During the time of growth & prosperity everyone enjoyed the benefits without consideration for real world property estimates & economic stability there was no chance for continued growth at any rate. When the economy hit the saturation point it collapsed leaving countless victims in its path. Upon collapse it was one of the hardest hit because of the thoughtless actions of a few who drove the economy to grow past its own capacity.

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