[Blue Lion]

Then in both cases we need the consumer to go out and buy. But no, the consumer is so terrified partly due to the media, they won't buy anything. The consumer not buying anything, brings business sales down, which makes stock owners sale because the business may lose money, the business has to make cuts to save money thus inducing layoffs, the media picks up the layoffs which are then broadcasted, in turn doing the exact same thing again.

The consumer does not have the money. That's the point, people aren't buying new cars because they're scared, they aren't buying them because they can't (couldn't) afford new SUVs and such with high gas prices.

People can't buy houses because they can't afford the loans. Older loans that gave sweet terms to people just don't exist because they collapsed. People got away with buying huge houses with little income, no down payment. They aren't going to start giving out these loans again just to make everything hunky dory.

Savings are going down, credit card debt is up and people aren't able to use their continually raising home values to get more cash.

Hmm, saw an article the other day saying money being saved is drastically up.

And I have articles that say people are blowing through their spending to pay bills. I'm sure some people are in fact saving money.

[perihelion]

Then in both cases we need the consumer to go out and buy. But no, the consumer is so terrified partly due to the media, they won't buy anything. The consumer not buying anything, brings business sales down, which makes stock owners sale because the business may lose money, the business has to make cuts to save money thus inducing layoffs, the media picks up the layoffs which are then broadcasted, in turn doing the exact same thing again.

If the current economic system cannot function without the vast majority of western civilization buying useless junk they do not need and, in the long run, cannot afford, maybe it needs to collapse.  If it cannot function without exploiting the impoverished 3rd world for the cheap manufacture of said junk, leaving them in a far worse condition than before "civilization" found them, maybe it needs to collapse.

[General Battuta]

Any data to back up the idea that the 3rd world is worse off than it was?

Any metrics to use to measure that?

[BengalTiger]

I'd personally say China became a huge player on the international arena and is experiencing huge economical growth thanks to being the world's factory.

Also- the economy would work without all the junk on the market, it would just be a lot smaller (think the early 1900's in the USA).

And finally- perihelion, let's say you get to choose what kind of economic system comes next, what is your idea for a replacement?