Surprise, surprise! Who could have known that everything done so far would not work and would make things worse?
Most non-Keynesian economists could have told you. Likewise most other human beings with an IQ above 100, not on the government payroll or flacking for them might also have told you.
Despite all the cheerleading from “pundits” and political hacks, conditions are not improving. This chart shows Net Private Investment for the past 70 years. The media focused on the recent little blip and headlined a “recovery” from the prior month. There was a slight improvement, but we are still near 70 year lows.
A more meaningful analysis would look at the chart from the perspective of the rather consistent decline over this period. Virtually each peak is lower than the prior one, and each trough is also. Rather than optimism from the recent blip, a serious underlying problem is apparent. The economy is dying slowly. It is ratcheting toward ruin. The Europeanization of America is producing the same effects it did in Europe.
Keynesian solutions became fashionable in the 1960s with the Kennedy “best and brightest” economic team. Ever since that time, every economic problem was met with a Keynesian response. Every response grew the size and role of government. We used debt and monetary injections to sustain bad investments. Over time, the effectiveness of each stimulus diminished, requiring larger and larger doses. The internals of the economy became weaker in each cycle.
The above chart shows capital decumulation or as Ludwig von Mises describe it, “eating the seed corn.” Capital creation is necessary in order for an economy to grow and living standards to increase. Only dying economies show patterns like this.
Charts pertaining to GDP growth, weekly wages, etc. show the same ominous decline. For example, real weekly wage rates are below where they were in 1964 and have been since 1977. The employment chart to the right shows employment as a percentage of the population. It shows the same pattern as private investment and other internal economic indicators. 
We are experiencing an economic crisis that started in the 1960s and dramatically accelerated in the 1970s. The economy now rests on a foundation of sand. Weaknesses can no longer be covered up via debt and government spending. That is the cause of the problem, not the solution. Continuing to perpetuate this charade will make matters worse. The problem is secular and results from a leviathan government. The solution is to diminish the government sector so that the private sector can return to former productivity levels. That is the only way to improve the living standards of the country.
It is unlikely that solution will be tried or even recommended until the economy collapses. A major crisis is the only way to effect the political change necessary to solve the economic problems.
