Financial Repression.

Financial Repression is a simple concept. By keeping interest rates below inflation, debts are supposed to go down. While, this is a somewhat murky concept, it isn't working. Debts in the US and in Europe are still rising though maybe slower. Add to this the problem of slow economic growth (which is now turning into a contraction) and governments continue with deficit spending.

There is an even more devastating development in the Western world and in the US in particular. The fancy word for it is cognitive dissonance - a total loss of the concept of cause and effect. The best example of this was the focus group run by Luntz during and after the 2012 State of the Union speech. Participants (even Romney voters) disagree with the trend of national affairs, disagree with the policies of Obama, yet they give Obama the benefit of doubt that he is trying. Obama and other Western leaders act as if someone else is running their countries. In fact, they campaign against the very policies (and the results of those policies) they are putting into place. The cognitive dissonance is not confined to the political class, but has invaded business as well. Some business leaders such as Buffet campaign for policies (higher taxes and more wasteful govt programs) that they know have a negative economic effect.

As long as the West is mired in the idiocies of Social Democracy (soft Socialism) the malaise will continue.