I've not weighed in much on the conversation because much of the discussion, in psychological terms, is beyond my ken.  But I would like to weigh in on the current economic thread.

Jason has very succinctly pointed out the inherent instability in capitalism, it's innate tendency to make the rich richer and the poor poorer.  When the old Soviet Union existed as a counterweight to laissez faire capitalism, capitalism had to maintain a kinder, gentler facade.  After the collapse, no holds have been barred with the result that the world's oligarchs have increased their wealth and power to the detriment of nearly everyone else, here and elsewhere.  So, as Jason points out, governments should intervene, to stabilize the system.  Unfortunately, ours, by "neoliberal economics" and in decisions like "Citizen's United" and the recent tax law, has intervened decidedly on the side of the wealthy and the oligarchs. Inequality in the US is at a level that often triggers revolution.

There is a missing piece to the economic landscape, however, that offers a legitimate way for monetarily sovereign nations to intervene in economically beneficent ways.  The notion is counterintuitive, because most of us are under the mistaken impression that federal budgets are analogous to family budgets.  Expenditures must be balanced by income.  Families, however, cannot legitimately print money. Sovereign governments can.  The argument against this is that printing money is inflationary, Weimar Germany being the oft-cited example.

Modern monetary theory (MMT) holds that the printing of money is allowed and is inflationary only when the country is at full production and full employment. Abe Lincoln financed the Civil War by printing "greenbacks" and Hitler built his war machine with fiat money. Indeed, recently, the US has printed trillions of dollars for the Afghan and Iraq wars and the 2008 bailout, yet inflation remains low.

MMT sees the federal budget as essentially the inverse of the family budget.  Taxation is necessary not to generate revenue but to slow the economy if it becomes overheated.  MMT proponents would say that we always have enough money for our priorities, which in an ideal world would include infrastructure, universal education, universal health care, and many other common goods.  In this light, austerity measures should be seen for what they are: political tools not fiscal responsibility.  And the recent tax overhaul, which will increase the national debt by $1.9T exposes, voted for those who previously touted "fiscal responsibility," exposes the sham.
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