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As a note I am not quiet happy with my historical narrative from the 1980's forward. It requires a bit more evaluation and reflection to be an accurate model . But is posted for what it is worth?

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World War 2 set the stage for the largest prosperity bubble of all time. The US at the end of world war two was not only the largest economy in the world being the Arsenal Of Democracy, but was the only intact industrial economy left standing in the world This then set the stage for the greatest influx of wealth the world has ever seen. For the next 20 years America had no economic competition as it all had been destroyed and needed rebuilding.

What this did for the American worker was make him a King, his labour was worth its weigh in Gold. As such he could charge anything he liked for his labour and the nations corporations had to go along with it. Thus the rise of the Unions and their sweetheart contracts. This created an unprecedented rise of the Middle Class in the US. Where a man with little education working in a factory could become middle class and live better than the kings of old.

By the 1960's the US was the King of the world with unprecedented wealth and power. It was at this time that the hubris of wealth and power set in with the US thinking everything we touch turns to gold. As such we looked around and said how could we spend this wealth. Thus the Great Society was implemented and as champion of the free world we became embroiled in the Vietnam war.

However by the late 1960's those nations that the US had rebuilt were offering competition to the US economically. This is when we spent the surpluses that we had accrued during our era of non competition in the world. This is when the US govt decided to carry on as if nothing had changed in the last 20 years and is reflected by LBJ putting the SS Trust into the GA. By the early 1970's Nixon took the US off the Gold standard as those USD were being repatriated at $35 an oz and the Gold was being resold in the world for over $100 an oz. This Gold standard was replaced by the USD becoming the oil standard. The OPEC nations tired of being given devalued USD's decide to boost the price of oil. Inflation set in reflecting the devaluation of the USD in world markets.

Thus by the 1980 US manufacturing was being beaten at its own game by the foreign competition and was no longer competitive due to increased regulation and labour costs. Thus we see an outflow of and decline of American manufacturing from the early post war period of 50% of the worlds manufactured goods to 21% today. This then ushered in an era of having a single industry drive the US economy. During the 1980's it was defense spending that created n era of prosperity. By 1990 with the collapse of the USSR the defense era of prosperity was tapering off and a revaluation of assets as a end of the Cold War dividend took place driving the US stock markets. Also during this period a whole new industry of technology swept the world. In which the US having had the capital in years past was able to devote to the R&D which enabled the US to be the leader of this new technological revolution.

By the year 2000 this technological revolution had reached a saturation point and foreign competition was making in roads into the US superiority. It was at this time that the US housing construction industry took off to fill the need of additional housing in the US. However due to 911 and the need for liquidity interest rates were lowered, this enabled the financial industry to capitalize on cheap money and drive the housing markets to unprecedented heights. this all had played itself out by 2008 when the whole overheated housing and financial markets came crashing down. Thus the end of the great American prosperity bubble.

Today the US is coming face to face with the limitations of our power in the face of ever increasing global competition. Government and the American people have to realize that the sky is no longer the limit for America. In all reality what made America the great powerhouse economically was its realization that we did have limits and as such were able to live within our means. This realization enabled America to act prudently which paid off handsome dividends. The US must realize that the great prosperity bubble of the last 60 years is not repeatable and that we must act prudently to remain prosperous.