A 'New Normal'

So with Perry and Cain both proposing various 'flat' taxes, apparently with the goal of getting wealth and income even more concentrated than its already historic concentration levels, we probably have to start bracing for the results.

Actions have consequences which have now become apparent. Gearing the economy towards ever-greater wealth concentration eventually results in systemic demand failure. You can't have steadily growing demand from consumers when all the income increases are going to the top.

You can still have economic cycles, of course: but they will be much shorter. This is because without broad-based income growth, any economic growth has to come purely from credit growth. This means brief credit-fueled boom-bust cycles on the order of 2-4 years, rather than long broad-based expansions on the order of 7-9 years. Recessions (and/or depressions) will be much more frequent.

The self-destructive economic philosophies driving towards these conditions (and current politicians' efforts to make these conditions even worse) show no signs of abating, despite some signs of growing resistance at the street level.

Paul