Berkshire VC: "It's Over"

Charlie Munger, Warren Buffett's long time Partner writes in Slate:

"Long-time business partner of Warren Buffett, Charlie Munger, writes in a new article for Slate.com that “it’s basically over” for the United States economy.

In his article, the Berkshire Hathaway vice chairman constructs the parable of Basicland, whose economy just so happens to run parallel to that of America.

In the beginning of Basicland, people live within their means, debt is limited to mortgages and some consumer loans, speculation is discouraged, and taxes are limited and pay for only “basic services” like fighting fires, defense, and the court system.

As a result, the economy happily grows at a steady annual rate of 3 percent.

But things take a turn for the worse, Munger writes.

“The extreme prosperity of Basicland had created a peculiar outcome: As their affluence and leisure time grew, Basicland’s citizens more and more whiled away their time in the excitement of casino gambling,” and financial services soon grow to account for too big a portion of the economy."