The reason the US and the entire industrialized world will collapse financially in the not too distant future can be seen in a few graphs. Economists use a simple plot to express the law of diminishing returns, which increase in the initial phases, plateaus, and finally declines. In the US, such a curve can been seen in the Earned Income to GDP ratio that peaked in 1950 (right side figure). While individual income in real terms stalled, women entering the work force in large numbers kept family incomes rising through the 1970s.

Oil production from conventional land-based wells in the lower 48 states peaked in 1970. Access to this inexpensive oil with its enormous economic leverage began to wane. The reduction in economic buoyancy as more expensive sources of oil were found led to an exponential growth in the amount of debt (both public and private). The left graph shows the total debt is now three times larger than GDP and climbing.

Similar debt-to-GDP levels are found in most industrialized countries. Most of this debt can never be repaid and we are now required to borrow new money to cover older debt. This is a Ponzi scheme by definition and Ponzi schemes never end well.