It may also be worth noting that most US States will have to slash jobs and spending in order to stay within their legally mandated balanced budget provisions, and thus schools, Medicare payments, infrastructure projects, and unemployment benefits will all be cut dramatically, leading to a further slump in demand across the USA. The Republican-controlled Senate refused to sanction Federal assistance to the States because GoP politicians cynically believed that “only Democratic States are in trouble.” This was, of course, even more stupid than the usual GoP realpolitik but was intended to win votes at the cost of destroying much of the USA’s productive capacity. Mindless and ignorant short-term thinking always wins over rational self-preservation. Amusingly, this will ultimately hurt Republican-dominated States even more because they’re less economically diverse and have fewer reserves to soften the blow. But that’s weeks or months away, and in the interim most of the damage will be done and will be irreparable.

Meanwhile the little boys and girls who frantically jump up & down about share prices are woefully uninformed about fiscal realities and that's one reason why we see such periods of irrational exuberance followed by equally irrational despair. The inevitable over-correction then makes everything even worse than the fundamentals imply. Dark times are indeed ahead - and we should remember that major financial crises always herald in periods of extreme social disruption. 1930s, anyone?

Anyone who enjoys my articles here on Medium may be interested in my books Why Democracy Failed and The Praying Ape, both available from Amazon.