Demand Limited Economics

(Updated to Remove Missing Links)

From an article no longer on the web:

What has changed in recent decades is that the mobility and automation of productive processes, combined with a glut of the supply of financial capital, results in a macroeconomic production function that is demand-constrained rather than supply constrained.

I have walked through empty malls with miles and miles of goods stacked to the ceiling, and no one around to buy.  We have global over capacity, and for the economy to run (or at least not break down) governments have to get more people to soak up this excess capacity.  So we have these perverse effects:

• The need for mass immigration, to create more consumers to buy crap
• The push for broken households, who spend more and save less 
• The push for more welfare and income distribution programs to create more buying
• The push for ever increasing amounts of consumer debt
• The push for ever more student loans
• The push for people to buy houses who shouldn't (yes, it's happening again)
• Ever increasing levels of government debt and monetary devaluation

The global economy is in a giant debt trap.  If consumers stopped buying the whole house of cards would come down.