Virtual reality check

The American economy requires a certain suspension of disbelief to operate.

Consider, for example, the credit markets. Unfortunately, the fourth wall has come down and the play has fallen apart.

I've long argued that our economy is based on a false foundation of credit and was bound to implode - perhaps in a series of bubbles, perhaps in a series of recessions.

I'm reminded of the old admonition: Neither a borrower nor a lender be. A good line, but an unrealistic goal in an economy that trades on bets made about the future. But something fundamental needs to change if the middle class - a relatively new invention, I might add - is to survive.

To me, the question isn't what happened to cause this credit crisis. The question is whether this economy can find something other than credit-based schemes to keep the middle afloat? After all, it was ill-advised mortgages that provided the money to millions to pay down other debts and buy the cars, computers and boats that kept our remaining industries singing along, including our biggest industry of all: service.

So what's next? After all the dominoes have fallen, do we set them back up? If not, what's the new strategy? What's the new way?

Just thinking out loud.