Creating equity for real hard assets no one can complain about, but the creation of too much equity too fast leads to runaway inflation thus interest rates get out of control in order to control. Austerity and collapse follow. There is a lean period, where values get readjusted. The assets during this period are harder to maintain, and may if margins be too high, be lost.
People complain about cycles, but with interest, they are inevitable. It is easy to see that easy credit whether for margined stocks, or loans heralds deflationary periods to come.
The bet that it will cause a collapse in society that leads to further contraction affecting the very civilization is also a fair one. It has happened. Often depressions and dire circumstances, loss of resources, leads to wars. This is primitive and predictable. There is enough strength in our society and enough insulation from outside forces that even drastic depressions will not cause collapse from foreign invasion. However gradual erosion will affect perhaps the next depression, but will definitely destabilize a future America.
Right now the social structure while weakening drastically is not yet defunct. We can see the signs of weakness. Marginalized lifestyle, excess taxes, rampant divorce, declining fertility, aging infrastructure, overbearing civil service, more arbitrary governance, increased incarceration, increasing minority unrest and rioting, subtle poisoning of foodstuffs in increasingly desperate attempts to supply and profit from distribution, unsupportable social costs (medicine, pensions, housing, jails, mother's allowance), unrealistic foreign and social policy outlook ... Eventually, compounded by increasing energy costs and a concommitant reduction in quality of life, in a more strained society, these factors will cause severe societal breakdown and possibly a low level civil war.
The Roman Empire fell, The Egyptian, the Norman, The British, The Austro-hungarian, the Nazi, the Hittite, the Hutu, the Celtic, the Viking, the Mongol, the Ptolemaic, The Czars, the Soviet, the Mayan, the Aztec, the Inca, all of the Amerindian, the French, the Holy Roman, the Finnish, the Seleucid, the Polish, the Carthaginian, the Persian, the Saracen, The Turkish -- they all fell.
It is a matter of time. Drastic change will come. Domination by some foreign power may come. The Page of history will turn and the past will be swept away. The first now will later be last. And with changing times changing more quickly now than before, it may be sooner than later. The causes are always the same, economic, social breakdown, family erosion, adulteration of food, breakdown of infrastructure, accumulation of waste, growing effeteness intellectually, and physically, weakening of health, lack of focus of youth, disaffection of disenfranchised groups, competition and attack from without, armies with fatal weaknesses.. The edifice crumbles always for the same reasons and the same way. And the age old tell tales are the squandering of wealth, excess taxation, rampant inflation, and the phenomenon of recycling.
Man if he is to survive and carry forward what is worth saving that goes above all loyalty to governments, must have some groupthink. Something that devotes its efforts along the lines of a covenant to provide sustainability of basic values that must persist to avoid a dark age intellectual tyranny. Perhaps Mao was right, a society to sustain itself must give into constant internal revolution, or it will become ossified and crumble all too surely in some perhaps not too far off time.
Is democracy that constant social revolution? If so, what is the comparable constant economic revolution that will continually forestall depression and collapse? We have seen it is probably not communism/socialism -- Vows of poverty?
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