“Kindleberger is correct of course. Minsky’s analysis does not rely on irrationality and stupidity: financial instability comes, among other things, from the internal logic of capitalist enterprise.” (Eric Tymoigne) Almost true. The free-market economy will break down for intrinsic systemic reasons. No angry mob, no revolution needed. In free-market economies, public debt has increased with minor interruptions for 200+ years. Growing debt has always been a crucial ingredient in Capitalism's life elixir. The representative economist doesn't get it. Put simply, he gets the foundational concepts of profit, distributed profit, income, saving, deficit, and debt wrong. That's why economics has been failed/fake science for 200+ years. The monetary economy in general thrives on growing private/public debt. If this growth stops, the economy implodes. Macroeconomic profit Qm is given by the axiomatically correct Profit Law Qm:=(I−Sm)+(G−T)+(X−M)+Yd. The Law implies Qm:=(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. The minimum requirement for a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. This should be easy to understand, but it has always been above economists' mental capacity. The free-market economy is continuously saved from breakdown by the deficit-spending/money-creating duo, Treasury/ Central Bank, i.e., the State. This means that the premise of mainstream economics, i.e., that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system, is axiomatically false. Ultimately, this means that the representative economist is too stupid for science. Currently, the USA is exploding the public debt. This increases macroeconomic profit Qm, according to the Profit Law. The point is that this is only the beginning. Profit will continue to increase exponentially and with it the number of billionaires/trillionaires. It does not matter how badly the real economy performs. The growing public debt ultimately benefits WeTheOligarchy and not WeThePeople. Since the household sector is taxed for interest on government bonds, there is an absolute upper limit for the growth of public debt, which is roughly given by public_debt * avg_interest_rate ≦wage_income. Economic problems, though, start much earlier because of other irreducible items in the budget (military, health, etc.) and a not exactly known upper tax-to-income limit. The limit moves further away into the future if the interest rate approaches zero. If interest rates go up, the wall will be hit sooner. Note well that the State acts as the interest collector for WeTheOligarchy. The USA is a clear example of how Capitalism works and that it will break down with systemic necessity. President Trump is currently in acceleration mode.
— AXEC (@EgmontHandtke) October 18, 2026
