My explanation is why a healthy economy should expand to provide increased standard of living for a generally increasing population. Your explanation describes, sadly, what has been happening in the last 30+ years in US. However, if you look at US economy, say, from 1800 to 1900, there were none of the pathologies you have described. There was no fiat money (money was mostly specie (Gold) based), debt was limited and handled with much fear and care, almost like dynamite but still the economy expanded probably a few dozen times in that period. Both due to population increase and a rise in standard of living. Same thing between 1900 to about 1970. The economic ills of modern times started around 1973/74 due to a combination of Vietnam war costs and energy crisis. Then we decided to borrow our way out of problems in the ’80s. ’90s was a bubble expansion due to tech and dot-com. This decade has been primarily a housing bubble. So , it was not always like what you describe. Even now, many of our creditor economies in Asia and Europe have a much healthier debt situation.
