"In relation to the fundamental flaw with the financial system which has been carefully identified and addressed by Dr. Heydorn in this article, it is interesting to note that the Bank of International Settlements postulated two theories in its 2015-2016 annual report - secular stagnation and financial bubbles, as explanations for the current malaise.
I think we could argue that these two are actually interrelated: secular stagnation is inevitable since costs rise faster than incomes: financial bubbles are the result of attempting to overcome such stagnation with increased borrowing. In which case, by tackling the first, (through a National Dividend, perhaps along with a Just Price mechanism) we can prevent the second."
I also came across this article by Dr. John Hussman which presents his analysis of the causes of US economic stagnation: https://www.hussmanfunds.com/wmc/wmc150330.htm
We won't agree with either the details of his diagnosis or his recommendations, but the following two sentences (at least) sound eerily familiar:
"U.S. wages and salaries have plunged to the lowest share of GDP in history, while the civilian labour force participation rate has dropped to levels not seen since the 1970’s. Yet consumption as a share of GDP is near a record high. This gap between income and expenses has been financed by debt accumulation, encouraged by the Federal Reserve’s policy of zero interest rates, and enabled by fiscal policies that prioritize income replacement rather than targeted spending and investment."
"Yet despite weak incomes, personal consumption as a share of GDP has never been higher. Not surprisingly, the same is true for consumer credit as a share of GDP, as monetary policy has encouraged the persistent accumulation of debt to bridge the gap between income and consumption."
This second comment is interspersed between two FRED graphs:
That last part is particularly striking: "Accumulation of debt to bridge the gap between income and consumption", or, in other words, prices.
Bridge that gap with 'debt-free' credit distributed on an equitable basis to everyone and you have Social Credit in embryo, as I tried to explain here: http://www.socred.org/index.php/blogs/view/dividends-instead-of-debts (emphasis added..ed)