The global economic model is fundamentally broken. Why is this? Fundamentally, its because we don’t need all the people we have to produce all the goods & services the population needs. So we have excess people who rely on the Welfare (or workfare) state for their livelihood.
There is only one way to keep the model running. That is to let Governments continue to accumulate massive amounts of debt but make that debt manageable—perhaps even profitable. And the way to do that is the Zero Interest Rate Program (ZIRP). Japan has been doing that since the early 90s. When the return on everything else is negative, the Rich will flock to Government securities that pay zero (or even negative) interest in order to preserve their wealth.
Does it work? Yes and no. It achieves torpid (zombie-like) stability at the expense of real growth. Because you can’t get real growth from Government debt. Especially debt that just appears out of thin air. They are hoping that the current approach will just paper things over until the next big thing (world war?) happens and sets everything “right” again.
Perceptive. There are ad hominem quotes from the Japanese man on the street to the effect, "Why do we need growth? We are the third largest economy. We have everything we need. I am satisfied."
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