RE:What a logical world Many say that the proper way to measure inflation is by measuring the time needed to work in order to sustain a given standard of living. It takes everything into account - decreasing disposable income because of rising taxes, wage increases, price increases.
How many hours per day did a master electrician/plumber etc need to work 10 years ago in order to sustain a given standard of living and how many hours do they need to work today to sustain the same standard of living? Measure inflation in time, not money.
By that measure, inflation is a lot higher than what is being reported because people are working a lot longer these days. So the system is being sustained by more input effort for an ever declining output reward or gain.
When will the system start to fail? Once people start losing jobs. The big threat is AI, deep machine learning, automation. Elon Musk is going to obsolete and replace millions of government jobs with AI. These days, once powerful unions are a shadow of their former selves. Look at the "rust belt" in the US. Most of those jobs were lost to automation, not because of offshoring production.
This economy is changing very rapidly. Strong balance sheets will be the only ones that will be able to adapt to it. Darwin never said "survival of the fittest". He essentially said "survival of the most adaptable". Can bte adapt to the changing conditions?