As we all know by now, the economy based on globalism has collapsed, propelling the world into into deep recession, if not outright Depression. In Washington, New York and financial capitals around the world, the beneficiaries of globalism are desperately trying to restore it. This attempt will fail, imo, because globalism was built on fraud. Simply put, Americans borrowed money from the Chinese so they could buy goods made in China. This was financed with overvalued homes that they could not afford. Such a system was doomed to failure from its inception.

 

 

Here is how it was spent:

 

Food at home: $3,465

Food away from home: $2,668

Housing: $16,920

Apparel and services: $1,881

Transportation: $8,758

Health care: $2,853

Entertainment: $2,698

Personal insurance and pensions: $5,336

Other expenditures: $5,060

Taxes: not provided

 

Note, non-essential purchases (food away from home, entertainment and "other") add up to over $10,000 a year. We know that many people bought bigger houses than they needed (or could afford) and more expensive cars than they needed, so the total amount of non-essential spending was likely quite a bit higher. Also noteworthy, although healthcare can be a matter of life and death, Americans spent nearly as much eating out at restaurants as they did on their medical care. [As an aside, in light of these numbers, the suggestion that stockpiling food for 12 weeks is unaffordable for most Americans is clearly nonsense.]

 

Does the "budget" above suggest prudent management of income? Hardly. This spending pattern resembles Nero's Rome more than it does Jefferson's America.

 

A number of blogs have likened attempts to resuscitate various banks with billions of dollars as trying to transfuse blood into a patient who is already dead. No matter how much you pump in, you cannot bring the dead back to life. I think this analogy can be extended to globalism as well. It is dead. It is not possible to bring it back. Lending money to people who cannot pay their current bills so that they can buy additional goods that they do not need is irrational. In part, I believe this strange behaviour is occurring because politicians cannot think of another basis for economic growth. This lack of imagination puts the world at risk of even greater disaster.

 

Decadence is dead. We cannot afford it. Our choice is a descent into poverty and chaos or a different type of economy.

 

In this essay, I will suggest a new model for economic growth based on resilience. As many will guess, my macroeconomic ideas are heavily influenced by my personal efforts at preparedness. It is my belief that preparing the country for a pandemic requires the changes necessary to meet many other challenges: peak oil, peak food, peak water, etc.

 

I will argue that creating a resilient economy can provide an engine for economic growth.

 

Additional blogs in this series will consider how changes in food, energy and other sectors can create a resilient economy.