Regarding the "normal state of the economy" and cycles, we had a discussion here of cycles in the UK housing market, and made the point that measuring growth rates "peak-to-peak", "trough-to-trough" and "trough-to-peak" give so widely different results that one has to be very careful in reasoning about these things. But the point is that what's "normal" is the business cycle, not any part of it. And if the latest US recession was minor, the recovery has been slow and "jobless". So maybe the business cycle is getting less pronounced, but that also means slower growth on the expansion side. [By the way, my "prediction" in that thread has already failed, in that the price index we had been discussing is growing again after plateauing for about 2 years, breaking any possibility of extrapolating past behaviour beyond the plateau]

And that is assuming that, long-term, the 3% growth rate is not an expansion phase of a very long business cycle with a pronounced collapse at either end. When people say complete collapse of our economic system cannot happen, I cannot but think of the end of the Roman Empire, or the 14th century in Europe. It has happened before and it could happen again.

As for the bit I paraphrase from the economics text I'm reading, I was reminded of reading Goldstein's classic Mechanics book, where he discusses phase diagrams of the harmonic oscillator and bifurcations, and he has the howler that "fortunately, bifurcations are rare in practice". That was one of the biggest blind spots of classical mechanics, as was discovered in the 1960's and 70's, shortly after the book was published.

"It's the statue, man, The Statue."