There should be no confusion as to the origins of the global economic crisis that began in 2008. This crisis was set in motion in the 1960s, when policymakers in the United States abandoned the core principles of economic orthodoxy: balanced government budgets and sound money backed by gold.

Large budget deficits and the possibility of financing them with paper money fundamentally changed the way the economy functioned and brought about a worldwide transformation that, over time, has deindustrialized the United States and left it heavily in debt. Paper money revolutionized all economic relationships by making credit abundant instead of scarce. In a complete break with the past, the government was no longer constrained in its ability to spend, and international trade was no longer required to balance. Economists, however, remained oblivious to this corruption of capitalism, and economic theory was left entirely unrevised.