The USA is in economic denial. You simply cannot spend more than you take in unless what you spend increases productivity. As we accelerate the debt with “bail out” initiatives none of the efforts is doing anything to fuel productivity.
If you spend money that isn’t creating new value well then all you are doing is piling up debt that has to be repaid. If you can’t repay debt then you and your country are bankrupt. Being bankrupt means you start over creating a new economy, individually and collectively.
What Will Fuel The New Economy?
Dan Robles writes: The Next Economic Paradigm is a very simple idea yet the overwhelming majority of people have absolutely no idea what we’re talking about. The strangest part of this work is the knowledge that eventually this will become completely obvious to everyone and the transformation, from beginning to end, will take a very short period of time.
My greatest curiosity is imagining when and how this moment will arrive.
I recently saw the latest Star Trek re-boot where an old Dr. Spock encountered the exiled young Space Propulsions Engineer named Montgomery Scott who had been convicted of attempting a mash-up between warp drive and atomic particle transporting with the commander’s pet schnauzer – where the term “mash-up” was implied to be quite literal.
Um,…the dog wags the tail.
The epiphany came when the older Spock suggested that Scotty’s approach was backward. Instead of assuming that Space was stationary and the spacecraft was moving, Scotty should assume that the Space is moving and the spacecraft is stationary.
In one fell swoop, all the calculations finally made sense. A good theory became practical. All those nasty side effects – like bringing the schnauzer atoms back together – were no longer a problem. Lo and behold, the Federation was saved.
Of course everyone knows what warp drive is and what transporters do, yet the science involved with their actual construction of these devices remains intensely complex. The same can be said for our financial system. Everyone knows how to buy a can of tuna fish, but the actual formulation of that transaction is intensely complex.
We have developed a vast set of processes, techniques, and infrastructure around the basic idea that markets are dynamic. Everyone knows that markets change and move and they behave in many strange ways in response to price inputs, scarcity, surplus, legislation and ideology.
Meanwhile, people are defined by what they consume – like red dots and blue dots on a political district chart, demographic data points, owner/renter, winner/loser, jobbed /not jobbed, young /old, first class/coach, etc.
And that is just the way it is … and the only way it can be.
Now suppose Dr. Spock was to beam down and suggest that markets are static and people are dynamic. Imagine everyone staring at the can of tuna just sitting there, lonely, dusty and static, doing absolutely nothing except being a can of tuna on a stationary shelf, in an inanimate “market”.
The epiphany is that human knowledge assets are completely and irrevocably tangible in every way, shape, and form. Humans allocate and trade social capital, creative capital, and intellectual capital with each other in infinite ways, sometimes resulting in a can of tuna in a market.
All knowledge assets are tangible in the right exchange system.
I wonder what they will call it?