Dr. Doom was right!

Scary!
http://www.youtube.com/watch?v=2I0QN-FYkpw&eurl=http://www.peter-schiff.com/
I am with this guy on most issues. His basic argument is that the US economy has been driven by a fake economy - run on spending and credit. Real economy should be run on production and savings. Recessions are "healthy" economic cycles that effectively rebalances a healthy economy toward a higher rate of production and savings than spending and credit. Therefore - the stimulous packages in the US and across the globe are doomed to failure. In fact, it inflates the problem.
The video essencially shows Peter Schiff over a 2 year period being taunted by the expert pundints as fundamentally wrong in his predictions. Well...not anymore.
My question is can innovation, education, healthcare and other types of activities that the US and other western countries still maintain a healthy lead in - allow economic growth without physical production?
Yes, the general consumers must move from spending to savings. This will hurt the economy on a global scale - but will the US and western Europe EVER bounce back?

Quote of the day...or of the past couple of centruries!

"Owners of capital will stimulate working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks which will have to be nationalized and State will have to take the road which will eventually lead to communism." (Karl Marx, 1867)

Sound familiar!