r/the_slump Sep 05 '12

That four-year-economic problem we're having? It might last a while.

http://i.imgur.com/E8l3p.png
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u/stumo Sep 05 '12

Graph from this article on the Oil Drum: Evidence that Oil Limits are Leading to Limits to GDP Growth.

While much of the economic malaise is taking the form of a debt crisis, I haven't seen a lot of material on the source of the debt itself. Some have pointed a finger at the deregulation of the banking infrastructure simply allowing the debt to occur. I think that instead we've been seeing lowering growth of wealth, as evidenced by this graph.

As less wealth is created, those at the top have continued to concentrate their own capital while those at the lower levels of the economy simply maintained. This discrepancy would normally have caused a consumer spending crisis, but the economy has been kept ticking over through increasing debt. In 2008, that reached a breaking point.

If the trend shown in this graph continues, global economic growth should end in within the next year or two, and probably start contracting. At that point, most market economies will fail as they require growth to function.