Maybe this time is different

Charles Hugh Smith is a very smart guy, he writes regularly at "of two minds" blog. In a recent article he observes that the economic landscape seems rife with a form of magical thinking:

1. We can grow our way out of debt by expanding debt
2. We can pay for everything we want if we print enough money
3. Some miraculous new technology will provide limitless energy/food at near-zero cost
4. We can solve big problems with small reforms 
5. More jobs magically appear because ...technology!

The sheer level of magical thinking alone seems different. The debt, the printing, the near-sightedness, and the reliance on technology-as-messiah are all at historic levels. 

We are told by learned economists that this time is not different, and the collapse will be predictable, predicted, and unavoidable. That this next crash will be just as bad as all crashes before.

So, which is it? Are we at historically bad conditions? Or is this next crash merely a tiresome sequel to a dismal movie? 

As with many significant chapters in our lives, we get many possible points along the continuum. Consider the best case scenario, that history does repeat itself, we will simply get a reset of the stock market; the uninvolved will be financially clubbed on the side of the head, and the American people will trudge back to work on Monday, trying their best to dig out of yet another government sponsored landslide. 

On the other hand, this could really be a big one, where the unprecedented magnitude of debt, red ink, corrupt politicians and unprepared financial institutions, leads to a major turn in the fortunes of every company in the S&P-500. What then? 

Maybe this time it is different.