LaRouche's EIR Magazine Documents 30-Year Collapse of U.S. Economy


Democratic presidential primary candidate Lyndon H. LaRouche, Jr., now in his sixth run for the White House, has commissioned and released a special issue of Executive Intelligence Review magazine documenting the 30-year collapse of the U.S. economy. "We are at the end of an epoch," LaRouche warns in a companion piece printed in the Jan. 1, 1996 EIR, and neither the U.S. economy nor the world financial system of which it is the linchpin can survive in their present form.


Here's what you've been looking for--the proof, in 30 pages of color graphs and charts, of how the U.S. economy is terminally "unbalanced"; and therefore, all the talk about balancing the federal budget is idiotic. Instead, emergency, production-based economic and financial measures are required in the United States, and worldwide, to generate the revenue base to support necessary functions of government, and provide for the common good of nations.

'30-Year Collapse of U.S. Economy'

The Jan. 1, 1996 Executive Intelligence Review special graphics report, titled "The 30-Year Collapse of The U.S. Economy," was commissioned by Lyndon LaRouche, statesman-economist and Presidential candidate, to lay out graphically the end-phase of the U.S. economy, which is the cornerstone of the world financial system.

If you measure the right magnitudes (infrastructure, and essential inputs and output per household, per hectare, etc.), there has been no economic growth in the United States, nor anywhere on the planet, in the last 30 years.

At the same time, there has been in recent years, hyperbolic growth in financial values--derivatives, foreign exchange trade, and speculation of all types. And money valuation is rising out of all proportion to physical economic reality.

Therefore, we are at a point of divergence so extreme, of declining physical-economic input/output, and soaring financial and monetary aggregates, that a blowout phase is imminent--a matter of only weeks or months.

A color schematic graph of this process--"Disintegration of the World Economy; A Typical Collapse Function," is featured on the cover of the Jan. 1 EIR.

The companion articles to the EIR graphics report are two speeches given at an international conference in Eltville, Germany on Dec. 2-3, sponsored by the Schiller Institute, and attended by policymakers from 30 nations.

In his speech, "We Are At the End of an Epoch," Lyndon LaRouche warns that today's crisis is the most profound in some 500 years--worse than what preceded either of the two world wars. There is only one avenue toward hope, and that is to unleash the creativity which is the essence of the human species.

The second speech is "Why Mankind Must Create a Community of Peoples Based on Natural Law," given by Schiller Institute founder and prominent German political leader Helga Zepp LaRouche. She warns that if Maastricht Treaty austerity (analogous to the Gingrichian Conservative Revolution) is continued in Europe, then conditions there will deteriorate to those of the Dark Ages preceding the 15th-century emergence of the nation-state. She draws attention to the great theorists and fighters for the communum bonum--the common good--especially Nicolaus of Cusa and G.W. Leibniz.

Over the past 18 months, LaRouche and his wife have travelled widely, meeting with policymakers in Russia, Germany, Slovakia, Sudan, and Japan; and conferred with legislators and constituency leaders from around the United States, on the crisis. The EIR graphics report has been designed as a crash-course study and teaching guide for those involved in formulating emergency economic measures. There are four main sets of a total of 80 color charts.

Statistical Documentation

There are four sets of graphs, which provide the statistical documentation for the study:

1. "U.S. Market Basket Shows 50% Decline Since 1960s." In one generation, production levels of many necessities in the common market basket have fallen, on a per household basis, by 50%; and the percentile of the workforce engaged in producing market basket necessities has fallen by half.

2. "America's Physical Economy Is Rapidly Disappearing." Percentiles of investment flows, and employment in essential economic activity--manufacturing, mining, transportation, water, power, health, etc.--have all dropped below minimum for reproducing the society.

3. "Financial Processes Split from Physical Wealth Production." The financial deregulation of the past three decades has decoupled financial processes from the underlying real physical economy, allowing financial turnover to increase 43,000% from 1956 to 1990, while real economic output and consumption, per capita, per operative, and per household, have fallen by one-third to one-half.

4. "Standing On the Edge of the Cliff." Most people think of a "crash" in terms of sharp drops in the stock market, runs on banks, hyperinflations or similar shocks, in which there are severe strains, but the financial system overall survives. We are beyond that. EIR estimates that annual financial turnover has more than doubled in the past five years, to about $500 trillion in 1995. There is no means to "bail out," "cash out," or cover this scale of financial claims, when the system goes.

Sources: The two principal sources for the charts are (1) the EIR economics database (consisting of roughly 500 tables), drawn from government, U.N., OECD, and industry and trade data; and (2) financial data from the UN (IMF, World Bank, WTO, GATT), private banking, and research agencies.

Explanatory text accompanies the charts, which are also available, on request and for a fee, from EIR in transparency and slide form, for teaching.

The single-issue price for EIR is $10; an annual subscription is $396 (available through EIR, P.O. Box 17390, Washington, D.C. 20041-0390).